Porter Hedges Successfully Represents BHP Billiton in $45M+ Oil Deed Suit

The Fourteenth Court of Appeals of Texas issued Porter Hedges client BHP Billiton a victory against Devon Energy in a case involving ownership of Haynesville Shale oil and gas interests located in Louisiana valued at more than $45 million. The court agreed that a trial judge had properly dismissed the suit for lack of jurisdiction and allowed KCS Resources LLC (a predecessor to Petrohawk, which is now BHP Billiton) to pursue attorneys’ fees.

The properties were the subject of a 2005 purchase and sale agreement between Devon and KCS Resources. In 2008, a third party driller notified KCS and Devon that it intended to drill wells on the properties and was not sure which of them owned the interests. Devon seized the opportunity to try and claim the now valuable Haynesville shale properties.

In 2009, Devon filed suit in Harris County seeking declaratory relief under the Uniform Declaratory Judgments Act regarding the parties’ intent under the PSA and subsequently executed deed as to what properties were conveyed. KCS moved to dismiss the case three times arguing that the court lacked subject matter jurisdiction to issue an advisory opinion and that Devon was asking the court to declare title to land located in Louisiana. KCS also moved for summary judgment on its counterclaim for attorneys’ fees. The trial court granted KCS’s summary judgment on the subject matter jurisdiction issue but denied summary judgment on attorneys’ fees.

Devon appealed the subject matter jurisdiction issue and KCS appealed the attorneys’ fees issue. The Fourteenth Court found in favor of KCS on both issues. It held that Devon’s requested declaratory relief sought an impermissible advisory opinion concerning title to Louisiana mineral interests and affirmed the trial court’s judgment that the case needs to be tried in Louisiana. It also held the trial court had authority under the Uniform Declaratory Judgments Act to consider KCS’s claim for attorneys’ fees. The Court reversed and remanded for the trial court to determine whether, in its discretion, KCS is entitled to attorneys’ fees and costs arising from its defense of Devon’s declaratory judgment action.

In the Press:

"Devon Energy's Oil Deed Suit Stays Dead In Texas," Law360