John M. O'Quinn, lead trial attorney for Anglo-Dutch, said that the jury originally awarded $70.4 million last October against Halliburton and Ramco and that the judge's ruling affirmed the jury's verdict and awarded and additional $35.6 million for attorney's fees, court costs and pre-judgment interest. Mr. O'Quinn further reported that "Halliburton and Ramco have threatened to appeal this Final Judgment, but that such an appeal would actually subject them to a greater risk because Anglo-Dutch will ask for the right to recover punitive damages in the amount of four times the current judgment, if there is any re-trial."
The Anglo-Dutch companies are privately owned oil and gas companies based in Houston, Texas. In the mid-1990's, Anglo-Dutch and its co-ventures started development of the Tenge oil and gas field, located in western Kazakhstan, near the Caspian Sea. In 1997, Anglo-Dutch sought to raise monies to acquire the interests of some of its co-venturers in the Tenge field. Halliburton and Ramco expressed interest in joining Anglo-Dutch in buying the sellers' interests and in developing the Tenge field. Both companies signed confidentiality contracts with Anglo-Dutch, and were given access to Anglo-Dutch's data room, which housed extensive geologic, geophysical, production history, economic and contractual information on the field.
By U.S. standards, the Tenge field is large. In 1997, Halliburton's own Reservoir Description Group calculated the recoverable reserves of Tenge to be approximately 183 million barrels of oil and 1.7 trillion cubic feet of gas.
In October 1997, Halliburton and Ramco entered into a partnership agreement. In November 1997, Halliburton and Ramco entered into a commercial agreement with Anglo-Dutch that if the transaction closed (1) Halliburton and Ramco would each provide 50% of the funds necessary to acquire the co-ventures' interests, (2) Halliburton and Ramco would each provide 50% of the funds necessary to develop the field, (3) Halliburton would manage the field, (4) Halliburton would win the service contracts on the field, (5) Anglo-Dutch would retain a 10% carried interest in the field, and (6) neither Halliburton nor Ramco would circumvent Anglo-Dutch.
In early 1998, Halliburton and Ramco hired Golden Eagle Partners S.a.r.L., a Swiss company operating in Kazakhstan, as their agent and contractor. Halliburton and Ramco wanted Golden Eagle to use its political influence to get Kazakhoil, the Kazakhstan national oil company, to sell a portion of its interest in the Tenge field at a discounted price. Halliburton and Ramco made confidential information available to Golden Eagle during their due diligence on the Tenge field. Confidential information included detailed economic models, field development plans, legal opinions, and an audit from Arthur Andersen. During trial, testimony was given that neither Halliburton nor Ramco obtained confidentiality contracts from Golden Eagle, nor did any of the Halliburton and Ramco officials advise Golden Eagle that Anglo-Dutch's information was confidential.
In September 1998, Halliburton and Ramco invited Mr. Van Dyke and Anglo-Dutch's Director of Finance, Steve Clayton, to a meeting in Houston. At that meeting, the Halliburton and Ramco officials told Mr. Van Dyke that unless Anglo-Dutch was willing to only receive about 25% of the value that Halliburton and Ramco had previously agreed to assign Anglo-Dutch, then they would not close the transaction. Mr. Van Dyke told Halliburton and Ramco that Anglo-Dutch would not accept their last minute re-trade.
In November 1998, Anglo-Dutch requested that Halliburton and Ramco return its confidential information. Halliburton and Ramco retained significant portions of Anglo-Dutch's confidential information; and within days of Anglo-Dutch's request for its data to be returned, Ramco wrote Golden Eagle a letter giving it a release to pursue the Tenge field on its own, but warned Golden Eagle not to disclose the source of its information about the field or there could be a lawsuit.
Soon thereafter, Golden Eagle contacted Anglo-Dutch's co-ventures and started negotiations to purchase their interests without Anglo-Dutch's knowledge. During trial, the jury was shown Halliburton inter-company emails. Those emails showed that Halliburton was attempting to use Anglo-Dutch's confidential information that it had failed to return to assist a company in acquiring the Tenge field so that Halliburton could earn the service contracts on the field.
In February and March 2000, Golden Eagle signed contracts with Anglo-Dutch's co-ventures to purchase their interests and the interest of Anglo-Dutch in the Tenge field. To assist Golden Eagle in its purchase, in a two day meeting, one of Halliburton's contract-employees gave to Golden Eagle engineering, pricing and economic information on the Tenge field that had taken Halliburton over eight months to collect with Anglo-Dutch assistance. After Golden Eagle made the acquisition, Halliburton was awarded a service contract on the Tenge field.
When Anglo-Dutch learned that Golden Eagle was about to acquire the sellers' interests and Anglo-Dutch was going to loose its own interest in the same transaction, Anglo-Dutch filed suit on May 5, 2000, against Halliburton and Ramco in Texas State court in Harris County, Texas. In face of the lawsuit, neither Halliburton nor Ramco took action to prevent their contractor, Golden Eagle, from acquiring the Tenge field interests.
On October 23, 2003, after an eight week long trial, the jury found against Halliburton, Ramco and their consultants on all of the issues submitted to them by the Court. Those issues included that (1) Halliburton and Ramco had violated their confidentiality contracts with Anglo-Dutch, (2) Golden Eagle had been a contractor of Halliburton, (3) Golden Eagle failed to comply with the confidentiality contracts which Halliburton and Ramco had with Anglo-Dutch, and (4) Halliburton and Ramco were partners in the transaction. The jury awarded Anglo-Dutch a total of $70.4 million against Halliburton and Ramco for past and future damages.
This past Friday and Monday, without lawyers present, Mr. Van Dyke and Mr. John W. Gibson, President and Chief Executive Officer of Halliburton Energy Services, Inc., met to attempt to reach a settlement for Halliburton's liability, but the principals could not agree on the settlement amount for Halliburton.
Anglo-Dutch was represented by John M. O'Quinn of O'Quinn, Laminack & Pirtle, and John L. McConn, Jr. and Jett Williams III of McConn & Williams LLP.
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