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CAUSE NO. 2016-45652
PEREGRINE OIL & GAS, LP § IN THE DISTRICT COURT OF
Plaintiff,
§ HARRIS COUNTY, TEXAS
HRB OIL & GAS, Ltd. and
VHPM, LLC
Defendants. § 190 JUDICIAL DISTRICT
PLAINTIFF’S RESPONSE TO DEFENDANT HRB OIL & GAS LTD.’S MOTION TO
EXCLUDE THE EXPERT TESTIMONY OF JEFF WEEMS
TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiff Peregrine Oil & Gas, LP files its Response to Defendant HRB Oil & Gas Ltd.’s
Motion to exclude the expert testimony of Jeff Weems, and in support thereof states as follows:
INTRODUCTION
Defendant HRB Oil & Gas Ltd., (“HRB”) seeks exclude any testimony from
Jeff Weems as to Council of Petroleum Accountants Societies (“COPAS accounting procedures
or payout calculations. HRB does not, apparently, challenge Mr. Weems as an expert on oil and
gas matters or on the provisions of the Offshore Operating Agreement (the “OOA”).
The is based on and substantially follows a form agreement promulgated by
the American Association of Petroleum Landmen (the “AAPL”) for the joint operation of oil and
gas properties. The form referred to by the AAPL as the Model Form Operating Agreement
and in oil and gas practice simply as the Joint Operating Agreement or JOA in the case of
offshore properties the OOA. The OOA as executed between the parties in this litigation is a
thirty eight page agreement, plus additional promulgated form exhibits to be used with the form
agreement, including Exhibit A (describing the parties interests and defining the Contract Area),
Exhibit B (covering insurance matters), Exhibit C (the “COPAS exhibit , describing among other
things how statements and billings will be made, how the Joint Account will be managed, audit
rights and other matters), Exhibit D (non discrimination provisions), Exhibit E (gas balancing
agreement) and Exhibit F (a recording memorandum). The form JOA and the form Exhibits are
drafted to be used as one, with all provisions designed to work together.
ARGUMENT
HRB noticed and deposed Mr. Weems on December 11, 2019. A copy of Mr.
Weems’ deposition is attached hereto as Exhibit 1.
As a currently practicing oil and gas attorney and as a former oil and gas landman,
Mr. Weems served on the AAPL’s task force charged with rewriting the Model Form Operating
Agreement for use in the industry both to modify it for use with horizontal wells and to publish a
new version of the JOA for use in the industry.
Mr. Weems is also Chairman of the State Bar of Texas Oil, Gas & Energy
Resources Law Section, a Trustee of the Rocky Mountain Mineral Law Foundation and a member
of the American Petroleum Institute Production Group.
In his years of experience as an oil and gas landman, Mr. Weems has negotiated
and drafted the terms of specific Joint Operating Agreements, interpreted the agreement as it
applies to specific oil and gas operational issues, including payout as in issue here, and has testified
as to his resulting experience with how payout is handled in typical oil and gas company
operations. As a practicing landman, then, he developed specific knowledge about the general
understanding of the various terms throughout the industry and how the industry participants
carried out their obligations under it. As a participant responsible for the redrafting of the AAPL
Model Form Operating Agreement, he necessarily had to understand the legal meaning and the
practical implicationsof the entire agreemen t, including the form COPASattachment
This case involves the contractual basis for Peregrine’s charge to HRB, as a post
eriod adjustment, for amounts owed by HRB to Peregrine after a reconciliation of all accounts
between Peregrine, as Operator, and HRB and the other Non Operators. In reversing this court’s
mmary Judgment against Peregrine, the Court of Appeals looked to the language of the OOA
and the COPAS exhibit, and found that taken together, the arties’ intent was unclear withregard
to what constituted “chargesunder the OOA.
HRB argue that since the COPAS exhibit relates to accounting issues, only an
accountant can testify as to its provisions, and that since calculation of payout involves
accountants, only accountants can testify about any aspect of payoutSince Mr. Weems is not an
accountant, HRB characterizes Mr. Weems testimony as “unfounded, unreliable, and will not
assist the trier of fact to understand the evidence.”
HRB sees the tree but misses the forest in its objection to Mr. Weems. First, the
COPAS exhibit is part of and integrated into the OOA. Second, while the COPAS exhibit relates
to accounting issues, it is far from the only portion of the OOA relevant to the issues in this case.
Mr. Weems testified that other provisions of the not the attached COPAS exhibit determine
the correctness of Peregrine case. Third , Mr. Weems has testified that accountants are not the
Pg. 12, ll 20 24 of Weems deposition: Q. In general, do you have an opinion as to whether
which document controls if there's a (22) conflict between the operating agreement and the COPAS
accounting procedure? A. The operating agreement controls.
Pg. 35 36, ll24 25 and 1 13 of Weems deposition: Q. Okay. And where do I look to in this
agreement to determine what charges are due under this Page 36 agreement? A. You look here.
only persons who use the COPAS agreement, and that itis typically used by and relied on by
landmen as well. One does not need to be an accountant to testify regarding how the landmen
who use the COPAS agreement or any of the other exhibits understand and interpret them, or how
the lawyers and landmen who wrote the Model Form Operating Agreement meant its provisions
to be used. Fourth, the Court of Appeals found an ambiguity between the COPAS exhibit and the
OOA.
Mr. Weems is prepared to provide testimony regarding 1) how the parties
responsible for the drafting of the OOA intended how the COPAS exhibit was to interact with the
OOA, and 2) how the industry which utilizes these agreements understands their meaning and the
meaning of the terms thereinin its ordinary course of dealing.
As one of the drafters of the form JOA promulgated by the AAPL (a form which
was designed to function with the inclusion of the COPAS exhibit) and as a former landman who
utilized the form document in the activities for which it was designed, Mr. Weems is
unquestionably qualified to testify regarding, at a minimum, how those drafters understood the
provisions of the entire agreement with all exhibits, how those provisions interacted with each
You look in 22.3. So you look here in Article 8. You look in 22.3, where the operator is to sell
production and then pay for the pay to the non operator their share of that. And so if there is a
mistake in that payment, then or not a mistake. In fact, strike hat word, because it's not a
mistake. But if there is a later found to be (10) something incorrect in that payment where it needs
be adjusted, then that would e handled if it's something the non operator owes, it will be
a charge due under this agreement.
Page 36, ll 25, (14. What provisions in this operating agreement (15) do I look to to see what
charges can properly be made (16) to non operators? (17) A. Article 8. (18)Q. Any specific provisions? (19)
A. The entire entire Article 8. I would look (20) at I would look at all of Article 8. And then the (21)
COPAS procedures, which is Exhibit C to this operating (22) agreement. And then to the specific language
within (23) 22.3, where the and, frankly, as that's expanded (24) through Article 8 of the participation
agreement, which (25) allows the operator to sell all production of all.
other, and how ordinary individuals in the industry understand their meanings. As a landman
involved in properties in which payoutoccurred, he is unquestionably qualified to testify as to his
experiences regarding the occurrence of payout and his understanding of the term.
As an unscientific expert, the reliability of Mr. Weems testimony should be
evaluated based upon his general methodology and its application to the particular matter at issue.
Here, Mr. Weems bases his testimony upon 1) his years of experience as an attorney in oil and gas
matters, including involvement with payout in oil and gas properties, 2) his experience as a
landman, and specifically on his experience in the industry dealing with the JOA and its exhibits,
including the COPAS exhibit, and payout of oil and gas properties, and 3) his involvement in
drafting the forms utilized in the preparation of the OOA His experience, and thus his testimony,
clearly relates to precisely the matters on which his testimony is offered.
As one with specific, special knowledge regarding both the intent of the party who
promulgated the form JOA used for this specific OOA and the customary usage and course of
dealing with respect to that language in the industry, Mr. Weems testimony is testimony that
Page 12, ll 6 19: (6) Q. And did any of your work for this development (7) involve also the COPAS
Accounting procedure that went (8) along with the operating agreement? (9)A. No so much as making
changes to it. Whenever (10) you have an operating agreement, you'll have your (11) Exhibit C. You'll have
your COPAS that comes along (12) with it. And there were no real changes with COPAS. (13) What we did
do was e asked COPAS for comments on our drafts of the model form agreement, and they
were very kind enough to comply with our request and send us a book of recommended or suggested
changes or hints or additions to the model form, which we considered each one of them. And
some we accepted and some we did not.
Page 24, ll 3 18: (3. Have you ever represented a client in a (4) lawsuit involving the calculation of the
payout of a (5) well or payout of a project? (6)A. As an attorney, no. (7)Q. Okay. As in any other capacity?
(8)A. As a landman, I have been involved with (9) hundreds of situations where payout calculations were
(10) involved. The accounting group would do the (11) calculations, but I was involved with the land side
of (12) things, determining when you know, if and when we (13) are notified that payout occurs and
then handling the (14) documentation and the change of interest that's often involved in agreements
when payout occu Q. And was this when you were acting as a landman? A. Yes. Yes.
Also see footnote 4 concerning COPAS comments to new JOA form.
will not assist the trier of fact to understand the evidence but is rather precisely the type of
testimony which the Court of Appeals stated was necessary. The Court of Appeals specifically
identified a genuine issue of material fact as to whether the amounts at issue here were “charges”
under the OOA. The testimony of an individual with specific expertise as to both how the form
drafters intended the agreement to be read in its totality and how the industry commonly uses and
applies the language in the agreement can hardly be considered to be of assistance in
understanding the evidence. Mr. Weems’ testimony is reliable, relevant to the issues and helpful
to the trier of fact.
HRB also complains that Mr. Weems opines on the contractual statute of limitations
included in the COPAS exhibit, i.e. the provision for audits or exceptions to accounting reports.
See page 2 of Motion to Exclude). The contractual statute of limitations in the COPAS is not an
accounting concept, rather it is a legal concept and one that informs Mr. Weems’ opinions in this
case that the post period adjustment was timely and an appropriate charge under Article 8.7 of the
Mr. Weems does not and will not testify on COPAS accounting procedures, but he
will testify about “payout” as it is understood in the industry. In fact, the COPAS accounting
Pg. 47, ll 5 20: A. Again, we're dealing with their share of production. And so when later facts
reveal that payment made into a non operator for Peregrine's marketing of their share of
production was incorrect, whether through pricing, whether through volumetric calculation, or
whether through a redetermination of the share, then if it results in an overpayment into the
non operator, then a charge is made to the non operator to reconcile and balance that amount.
Q. So the basis for your opinion that this invoice to HRB for overpayment of production revenues
was a charge under the agreement is the language you just got through reading to me; is that
correct? A. Yes. Q. That's your testimony? A. Yes.
Pg. 26, ll 11 22: (Q. You said in your explanation the ( determination of payout, I guess, often depends
the language of the agreement? (14)A. Yes, but there is a certain industry (15) understanding of
payout. (16) Q. And where can I find this understanding? (17)A. It's ask anyone.
(18)Q. Okay. Does it show up in Williams & Meyers (19) definition of terms? (20)A. They may it may, but
payout will determine will be determined on the nature of the transactionthat's involved.
exhibit does not define “payout” so how could Mr. Weems run afoul of HRB’s objection when the
term is not included in the COPAS accounting procedures Mr. Weems’ testimony is that the
definition of “payout” is commonly understood in the industry. Further, the issue here is not
“payout” but rather is a post period adjustment a “charge.”
Mr. Weems’ testimony is that Peregrine was entitled to charge HRB for the
overpayment of revenues known as post period adjustments and to have HRB comply with the
“pay first, challenge later” provisions of the OOA.
PRAYER
HRB’s Motion to Exclude the Expert Testimony of Jeff Weems should be denied
in its entirety.
Peregrine requests this honorable Court to set this matter for hearing and to enter
an order denying HRB’s Motion.
Pg. 49, ll 7 10: ( . Is payout defined in any of the agreements ( relating to HRB's participation in this
block? (A. I think that's asked and answered, and no, ( 10) it's not.
Pg. 45, ll 4 22: A. (4) Peregrine is authorized to sell and was ( authorized by the actions of the parties,
was ( authorized to sell production under 22.3 and Article 8 ( the participation agreement. That
authorization was ( for the share of the each individual non operator's shareof production. When
subsequent calculations reveal that operator is paid for more than their share of production, for
whatever reason, whether it's a post period adjustment, a price recalculation, or for as the subject
of the dispute here, where there is a determination done after the fact of a of a event of payout,
then they are allowed to Peregrine is allowed to charge, under the agreement, to the non operators
to balance that account and to to reconcile and justify that account, which, frankly, which action is
really borne out by the actions of the other non operated interest owners who paid up and treated that
as a charge.
Respectfully submitted,
ONES ILL ORTER RAWFORD
RAWFORD
By:s/s Michael D. Jones
Michael D. Jones
tate Bar No. 10929350
Joseph D. Porter
State Bar No. 16150100
6363 Woodway, Suite 1100
Houston, Texas 77057
Telephone: (713)652 4068
Facsimile: (713)651 0716
Email: mjones@jonesgill.com
Email: jporter@jonesgill.com
ATTORNEYS FOR PLAINTIFF.
PEREGRINE OIL & GAS, LP
CERTIFICATE OF SERVICE
I hereby certify that on this day of October, 2020, a true and correct copy of the above
and foregoing PLAINTIFF’S RESPONSE TO DEFENDANT HRB OIL & GAS LTD.’S
MOTION TO EXCLUDE THE EXPERT TESTIMONY OF JEFF WEEMS was sent to counsel
of record at the following address by first class U. S. Mail, certified mail, return receipt requested,
facsimile transmission, messenger/hand delivery, or express delivery:
Barry F. Cannaday
Dentons US LLP
2000 McKinney Ave. Suite 1900
Dallas, Texas 75201
0900(telephone)
0910 (facsimile)
barry.cannaday@dentons.com
/s/Michael D. Jones
Michael D. Jones
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CAUSE NO. 2016-45652 PEREGRINE OIL & GAS, LP § IN THE DISTRICT COURT OF Plaintiff, § HARRIS COUNTY, TEXAS HRB OIL & GAS, Ltd. and VHPM, LLC Defendants. § 190 JUDICIAL DISTRICT PLAINTIFF’S RESPONSE TO DEFENDANT HRB OIL & GAS LTD.’S MOTION TO EXCLUDE THE EXPERT TESTIMONY OF JEFF WEEMS TO THE HONORABLE JUDGE OF SAID COURT: Plaintiff Peregrine Oil & Gas, LP files its Response to Defendant HRB Oil & Gas Ltd.’s Motion to exclude the expert testimony of Jeff Weems, and in support thereof states as follows: INTRODUCTION Defendant HRB Oil & Gas Ltd., (“HRB”) seeks exclude any testimony from Jeff Weems as to Council of Petroleum Accountants Societies (“COPAS accounting procedures or payout calculations. HRB does not, apparently, challenge Mr. Weems as an expert on oil and gas matters or on the provisions of the Offshore Operating Agreement (the “OOA”). The is based on and substantially follows a form agreement promulgated by the American Association of Petroleum Landmen (the “AAPL”) for the joint operation of oil and gas properties. The form referred to by the AAPL as the Model Form Operating Agreement and in oil and gas practice simply as the Joint Operating Agreement or JOA in the case of offshore properties the OOA. The OOA as executed between the parties in this litigation is a thirty eight page agreement, plus additional promulgated form exhibits to be used with the form agreement, including Exhibit A (describing the parties interests and defining the Contract Area), Exhibit B (covering insurance matters), Exhibit C (the “COPAS exhibit , describing among other things how statements and billings will be made, how the Joint Account will be managed, audit rights and other matters), Exhibit D (non discrimination provisions), Exhibit E (gas balancing agreement) and Exhibit F (a recording memorandum). The form JOA and the form Exhibits are drafted to be used as one, with all provisions designed to work together. ARGUMENT HRB noticed and deposed Mr. Weems on December 11, 2019. A copy of Mr. Weems’ deposition is attached hereto as Exhibit 1. As a currently practicing oil and gas attorney and as a former oil and gas landman, Mr. Weems served on the AAPL’s task force charged with rewriting the Model Form Operating Agreement for use in the industry both to modify it for use with horizontal wells and to publish a new version of the JOA for use in the industry. Mr. Weems is also Chairman of the State Bar of Texas Oil, Gas & Energy Resources Law Section, a Trustee of the Rocky Mountain Mineral Law Foundation and a member of the American Petroleum Institute Production Group. In his years of experience as an oil and gas landman, Mr. Weems has negotiated and drafted the terms of specific Joint Operating Agreements, interpreted the agreement as it applies to specific oil and gas operational issues, including payout as in issue here, and has testified as to his resulting experience with how payout is handled in typical oil and gas company operations. As a practicing landman, then, he developed specific knowledge about the general understanding of the various terms throughout the industry and how the industry participants carried out their obligations under it. As a participant responsible for the redrafting of the AAPL Model Form Operating Agreement, he necessarily had to understand the legal meaning and the practical implicationsof the entire agreemen t, including the form COPASattachment This case involves the contractual basis for Peregrine’s charge to HRB, as a post eriod adjustment, for amounts owed by HRB to Peregrine after a reconciliation of all accounts between Peregrine, as Operator, and HRB and the other Non Operators. In reversing this court’s mmary Judgment against Peregrine, the Court of Appeals looked to the language of the OOA and the COPAS exhibit, and found that taken together, the arties’ intent was unclear withregard to what constituted “chargesunder the OOA. HRB argue that since the COPAS exhibit relates to accounting issues, only an accountant can testify as to its provisions, and that since calculation of payout involves accountants, only accountants can testify about any aspect of payoutSince Mr. Weems is not an accountant, HRB characterizes Mr. Weems testimony as “unfounded, unreliable, and will not assist the trier of fact to understand the evidence.” HRB sees the tree but misses the forest in its objection to Mr. Weems. First, the COPAS exhibit is part of and integrated into the OOA. Second, while the COPAS exhibit relates to accounting issues, it is far from the only portion of the OOA relevant to the issues in this case. Mr. Weems testified that other provisions of the not the attached COPAS exhibit determine the correctness of Peregrine case. Third , Mr. Weems has testified that accountants are not the Pg. 12, ll 20 24 of Weems deposition: Q. In general, do you have an opinion as to whether which document controls if there's a (22) conflict between the operating agreement and the COPAS accounting procedure? A. The operating agreement controls. Pg. 35 36, ll24 25 and 1 13 of Weems deposition: Q. Okay. And where do I look to in this agreement to determine what charges are due under this Page 36 agreement? A. You look here. only persons who use the COPAS agreement, and that itis typically used by and relied on by landmen as well. One does not need to be an accountant to testify regarding how the landmen who use the COPAS agreement or any of the other exhibits understand and interpret them, or how the lawyers and landmen who wrote the Model Form Operating Agreement meant its provisions to be used. Fourth, the Court of Appeals found an ambiguity between the COPAS exhibit and the OOA. Mr. Weems is prepared to provide testimony regarding 1) how the parties responsible for the drafting of the OOA intended how the COPAS exhibit was to interact with the OOA, and 2) how the industry which utilizes these agreements understands their meaning and the meaning of the terms thereinin its ordinary course of dealing. As one of the drafters of the form JOA promulgated by the AAPL (a form which was designed to function with the inclusion of the COPAS exhibit) and as a former landman who utilized the form document in the activities for which it was designed, Mr. Weems is unquestionably qualified to testify regarding, at a minimum, how those drafters understood the provisions of the entire agreement with all exhibits, how those provisions interacted with each You look in 22.3. So you look here in Article 8. You look in 22.3, where the operator is to sell production and then pay for the pay to the non operator their share of that. And so if there is a mistake in that payment, then or not a mistake. In fact, strike hat word, because it's not a mistake. But if there is a later found to be (10) something incorrect in that payment where it needs be adjusted, then that would e handled if it's something the non operator owes, it will be a charge due under this agreement. Page 36, ll 25, (14. What provisions in this operating agreement (15) do I look to to see what charges can properly be made (16) to non operators? (17) A. Article 8. (18)Q. Any specific provisions? (19) A. The entire entire Article 8. I would look (20) at I would look at all of Article 8. And then the (21) COPAS procedures, which is Exhibit C to this operating (22) agreement. And then to the specific language within (23) 22.3, where the and, frankly, as that's expanded (24) through Article 8 of the participation agreement, which (25) allows the operator to sell all production of all. other, and how ordinary individuals in the industry understand their meanings. As a landman involved in properties in which payoutoccurred, he is unquestionably qualified to testify as to his experiences regarding the occurrence of payout and his understanding of the term. As an unscientific expert, the reliability of Mr. Weems testimony should be evaluated based upon his general methodology and its application to the particular matter at issue. Here, Mr. Weems bases his testimony upon 1) his years of experience as an attorney in oil and gas matters, including involvement with payout in oil and gas properties, 2) his experience as a landman, and specifically on his experience in the industry dealing with the JOA and its exhibits, including the COPAS exhibit, and payout of oil and gas properties, and 3) his involvement in drafting the forms utilized in the preparation of the OOA His experience, and thus his testimony, clearly relates to precisely the matters on which his testimony is offered. As one with specific, special knowledge regarding both the intent of the party who promulgated the form JOA used for this specific OOA and the customary usage and course of dealing with respect to that language in the industry, Mr. Weems testimony is testimony that Page 12, ll 6 19: (6) Q. And did any of your work for this development (7) involve also the COPAS Accounting procedure that went (8) along with the operating agreement? (9)A. No so much as making changes to it. Whenever (10) you have an operating agreement, you'll have your (11) Exhibit C. You'll have your COPAS that comes along (12) with it. And there were no real changes with COPAS. (13) What we did do was e asked COPAS for comments on our drafts of the model form agreement, and they were very kind enough to comply with our request and send us a book of recommended or suggested changes or hints or additions to the model form, which we considered each one of them. And some we accepted and some we did not. Page 24, ll 3 18: (3. Have you ever represented a client in a (4) lawsuit involving the calculation of the payout of a (5) well or payout of a project? (6)A. As an attorney, no. (7)Q. Okay. As in any other capacity? (8)A. As a landman, I have been involved with (9) hundreds of situations where payout calculations were (10) involved. The accounting group would do the (11) calculations, but I was involved with the land side of (12) things, determining when you know, if and when we (13) are notified that payout occurs and then handling the (14) documentation and the change of interest that's often involved in agreements when payout occu Q. And was this when you were acting as a landman? A. Yes. Yes. Also see footnote 4 concerning COPAS comments to new JOA form. will not assist the trier of fact to understand the evidence but is rather precisely the type of testimony which the Court of Appeals stated was necessary. The Court of Appeals specifically identified a genuine issue of material fact as to whether the amounts at issue here were “charges” under the OOA. The testimony of an individual with specific expertise as to both how the form drafters intended the agreement to be read in its totality and how the industry commonly uses and applies the language in the agreement can hardly be considered to be of assistance in understanding the evidence. Mr. Weems’ testimony is reliable, relevant to the issues and helpful to the trier of fact. HRB also complains that Mr. Weems opines on the contractual statute of limitations included in the COPAS exhibit, i.e. the provision for audits or exceptions to accounting reports. See page 2 of Motion to Exclude). The contractual statute of limitations in the COPAS is not an accounting concept, rather it is a legal concept and one that informs Mr. Weems’ opinions in this case that the post period adjustment was timely and an appropriate charge under Article 8.7 of the Mr. Weems does not and will not testify on COPAS accounting procedures, but he will testify about “payout” as it is understood in the industry. In fact, the COPAS accounting Pg. 47, ll 5 20: A. Again, we're dealing with their share of production. And so when later facts reveal that payment made into a non operator for Peregrine's marketing of their share of production was incorrect, whether through pricing, whether through volumetric calculation, or whether through a redetermination of the share, then if it results in an overpayment into the non operator, then a charge is made to the non operator to reconcile and balance that amount. Q. So the basis for your opinion that this invoice to HRB for overpayment of production revenues was a charge under the agreement is the language you just got through reading to me; is that correct? A. Yes. Q. That's your testimony? A. Yes. Pg. 26, ll 11 22: (Q. You said in your explanation the ( determination of payout, I guess, often depends the language of the agreement? (14)A. Yes, but there is a certain industry (15) understanding of payout. (16) Q. And where can I find this understanding? (17)A. It's ask anyone. (18)Q. Okay. Does it show up in Williams & Meyers (19) definition of terms? (20)A. They may it may, but payout will determine will be determined on the nature of the transactionthat's involved. exhibit does not define “payout” so how could Mr. Weems run afoul of HRB’s objection when the term is not included in the COPAS accounting procedures Mr. Weems’ testimony is that the definition of “payout” is commonly understood in the industry. Further, the issue here is not “payout” but rather is a post period adjustment a “charge.” Mr. Weems’ testimony is that Peregrine was entitled to charge HRB for the overpayment of revenues known as post period adjustments and to have HRB comply with the “pay first, challenge later” provisions of the OOA. PRAYER HRB’s Motion to Exclude the Expert Testimony of Jeff Weems should be denied in its entirety. Peregrine requests this honorable Court to set this matter for hearing and to enter an order denying HRB’s Motion. Pg. 49, ll 7 10: ( . Is payout defined in any of the agreements ( relating to HRB's participation in this block? (A. I think that's asked and answered, and no, ( 10) it's not. Pg. 45, ll 4 22: A. (4) Peregrine is authorized to sell and was ( authorized by the actions of the parties, was ( authorized to sell production under 22.3 and Article 8 ( the participation agreement. That authorization was ( for the share of the each individual non operator's shareof production. When subsequent calculations reveal that operator is paid for more than their share of production, for whatever reason, whether it's a post period adjustment, a price recalculation, or for as the subject of the dispute here, where there is a determination done after the fact of a of a event of payout, then they are allowed to Peregrine is allowed to charge, under the agreement, to the non operators to balance that account and to to reconcile and justify that account, which, frankly, which action is really borne out by the actions of the other non operated interest owners who paid up and treated that as a charge. Respectfully submitted, ONES ILL ORTER RAWFORD RAWFORD By:s/s Michael D. Jones Michael D. Jones tate Bar No. 10929350 Joseph D. Porter State Bar No. 16150100 6363 Woodway, Suite 1100 Houston, Texas 77057 Telephone: (713)652 4068 Facsimile: (713)651 0716 Email: mjones@jonesgill.com Email: jporter@jonesgill.com ATTORNEYS FOR PLAINTIFF. PEREGRINE OIL & GAS, LP CERTIFICATE OF SERVICE I hereby certify that on this day of October, 2020, a true and correct copy of the above and foregoing PLAINTIFF’S RESPONSE TO DEFENDANT HRB OIL & GAS LTD.’S MOTION TO EXCLUDE THE EXPERT TESTIMONY OF JEFF WEEMS was sent to counsel of record at the following address by first class U. S. Mail, certified mail, return receipt requested, facsimile transmission, messenger/hand delivery, or express delivery: Barry F. Cannaday Dentons US LLP 2000 McKinney Ave. Suite 1900 Dallas, Texas 75201 0900(telephone) 0910 (facsimile) barry.cannaday@dentons.com /s/Michael D. Jones Michael D. Jones