11/20/18 - News
Devon Energy Headed for Trial in Defense Against $3 Million+ Claim
A decades-long disagreement that turned into a legal dispute between two energy companies is coming to trial in Houston, with SHJ Partner Logan Johnson leading the team defending Devon Energy Production Company.
The dispute began in 1996, when EP Energy Company and Devon were both drilling for oil in the Altamont-Bluebell fields of northeastern Utah. The two companies agreed that saltwater — a drilling byproduct — would be dumped into one another’s disposal systems. By 2002 there was an imbalance of 2 million barrels in EP’s favor, but within ten years the imbalance had shifted to Devon’s favor.
In 2013 EP asked Devon to agree that the parties would pay $1 per barrel of water disposed in the other’s system on a going-forward basis. Devon agreed. But EP also wants Devon to pay retroactively for the legacy imbalance of 3.32 million barrels. Understandably, Devon refused this after-the-fact fee, leading EP to sue for breach of contract in 2014, seeking $3.3 million in damages.
Trial is set for February 2019.