The 14th Court of Appeals unanimously affirmed SKV client BPX Energy’s multi-million dollar judgment against Crimson Exploration Operating, Inc. in a long-running dispute over drilling costs Crimson agreed to pay for a well drilled in 2012.
The trial court had entered judgment for BPX Energy subsidiary BPX Operating Company after a five-day trial in 2019, and Crimson appealed. The Court of Appeals rejected Crimson’s unreasonable interpretation of the parties’ joint operating agreement, noting that Crimson admitted that it consented to the drilling of the well in question and had agreed to pay its 20% share of the costs. The jury found that BPX had complied with the agreement, and the Court of Appeals held that the trial court was not required to submit instructions to the jury based on a performance standard that was different than what the parties agreed to in their contract.
BPX believed that the issues in the case were straightforward and did not require oral argument. The Court of Appeals agreed, denying Crimson’s request for oral argument and handing down its complete rejection of Crimson’s appellate arguments about a month after the case was fully briefed.
Lead counsel Land Murphy, of Smyser Kaplan & Veselka said, “We are very pleased that the Court of Appeals rejected Crimson’s arguments and recognized the well-understood plain meaning of the parties’ industry-standard model form operating agreement as it has been interpreted for decades. As the Court of Appeals held, BPX’s joint operating agreement prevents a company like Crimson from second-guessing operational decisions with the benefit of 20-20 hindsight and from refusing to pay its share of costs after consenting to operations.”
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