WhatWhat’’s Your Story?s Your Story?WhatWhat’’s Your Story?s Your Story?Jeff ParsonsJeff Parsons

Beirne, Maynard & Parsons LLPBeirne, Maynard & Parsons LLPHouston, Dallas & Austin, TexasHouston, Dallas & Austin, Texas

““El Pequeño ProblemEl Pequeño Problemaa ””

““El Pequeño ProblemEl Pequeño Problemaa ””

Or - Deep In the Heart of TexasOr - Deep In the Heart of Texas

El Pequeño Problema

The Prospect Generation

Agreements • Clients - - Family Partnerships • Rco - - E&P Co. owned by Mr. L and Mr. H

– Clients pay Rco big $$$ fees– Rco to bring Clients oil & gas prospects

• Clients can accept or reject any prospect – If accept a prospect, Clients get

• 35% Working Interest• And, “proprietary interest” in Rco’s seismic maps

and data on prospect

The Lopeno prospect• Rco discovers huge gas prospect

– 10-12 BCF – $70-90 MM in reserves

• Rco develops seismic map of Lopeno prospect

• Clients accept 35% W.I. in Lopeno prospect

• Rco leases Worley property to drill prospect– prepares to drill in January 2007

El Pequeño Problema• Rco - - Shows Seismic Map to various

people, but no “Confid. Agmts” – With its own Ds, Os or employees– With Clients or other investors

• Clients - - No “Confid. Agmts” – With Rco– With Mr. L or Mr. H– With individual family partners

The Treasure Map

El Milagro

Worley

The Lopeno Seismic Map

El Pequeño Problema

• Mr L is Chief Operating Officer of Rco– 50% owner of RCo– But, no confidentiality agreement

• Mr. L , Mr. H and RCo – sign Separation Agreement (eff. 12/31/06)– Mr. L sells all interest in RCo. to Mr. H– Mr. L gets right to “compete” with RCo– Mr. R keeps 25% W.I. in Lopeno wells

El Pequeño Problema

• 2007, Mr. L joins with Mr. “Cortez”• “Cortez” leases El Milagro property

– Next to Worley property– Worley wells visible from El Milagro

• L and C drill 4 wells on their lease• They extract 3.6 BCF from reservoir

El Pequeño Problema

•What’s Your Story?

Legal Claims vs. “Defenses”

• Complex Legal Claims

– Misappropriation of Trade Secrets

– Intentional Interference with Contract

– Civil Conspiracy

• “Ds will claim” - - -• “No trade secret”

– Seismic Map shown to investors

– No confidentiality agreements– Worley wells public

knowledge

• “No Interference”– Claim they did not use

seismic map– Claim they had right to drill

and compete

• “Big Anglo Ranchers” vs. 2 locals – 1 Hispanic

• Jury 100% Hispanic

The Solution

• A Simple Story– Ethos– Pathos– Logos

• Confirmed by Jury Research• Powered by Demonstrative

Exhibits

Jury Research• Important to keep promises – 100%• Business secrets are important – 95%• Important for businessmen to act fairly,

ethically – 90%• When leave employer, not OK to take

business secrets – 90%• Don’t need writing to warn “don’t take

other’s property” - 85%• Family is very important - 90%

Plaintiffs’ Opening“This Is A Simple Case”

• About “Right” vs. “Wrong”– Don’t Take What Doesn’t Belong to You– Don’t Break Your Promises– Don’t Interfere with Other’s Promises– Compete Hard but Honestly

• Defendants Broke All Four Rules

“This Is A Simple Case”

• “My Clients Did The Right Thing”– Kept their promises– Many family members invested small $– So Family could invest Big $$$$$– Family kept Lopeno secrets

• Only defendants who stole secrets

• Defendants’ Did the Wrong Thing– Took Family’s treasure map and secrets– Interfered with Family’s PGAs– Caused the Family $$ Millions in Damages

The Prospect Generation ContractsPX 4 & 6

Plaintiffs RCo.

Where is the Lopeno Prospect ?

The Treasure Map

Before Defendants’ Wrongful Conduct

1 mile

El Milagro Worley

After Defendants’ Wrongful Conduct

1 mile

El Milagro Worley