Texas jury: Southwestern Energy should pay $393M

Southwestern Energy Co. could be forced to pay up to $393 million after a jury in Shelby County sided with plaintiffs who accused a subsidiary of the Houston oil and gas firm of profiting from stolen trade secrets.

The jury delivered a verdict awarding plaintiffs Toby Berry-Helfand and Gery Muncey $11.4 million in damages. 

It also decided Southwestern’s Sepco subsidiary should pay $381.5 million for disgorgement of profits improperly gained from the information.

Plaintiffs were successful in convincing the jury that the Southwestern unit had broken the Texas Liability Act, misappropriated trade secrets, committed fraud and broken other laws related to a 2005 confidentiality agreement concerning two oil and gas prospects in East Texas.

In a statement today, Southwestern said it would “pursue all available options” to overturn the $11.4 million jury verdict. It also noted that the judge in the case has 30 days to decide how much if any of the disgorgement charge to give to the plaintiffs.

In the late 1990s, Berry-Helfand and Muncey had worked to develop a proprietary method for analying data from hundreds of wells in the region. After setting it aside a few years, Berry-Helfand, a reservoir engineer, resumed work on the project with another geologist, named Leon Wells, who is one of the defendents in the case.

“In a nutshell, they came up with a very sound method to determine the actual locations, called the sweet spots, of where you would want to drill horizontal gas wells in this formation,” Perry Zivley, a Houston attorney who helped represent the plaintiffs.

Southwestern, after meeting with the pair and reviewing the information, initially declined to buy into the area, known as the James Lime formation. But after gaining more data, via Wells, whose son worked at Southwestern, the company later purchased swaths of acreage and successfully drilled more than 100 natural gas wells there, Zivley said.