Longview Energy has won the largest court decision related to the Eagle Ford Shale to date. The company will be assigned all rights to 46,000 acres of leases in Zavala County that have a market value as high as half a billion dollars.
The case: Longview Energy Company v. The Huff Energy Fund L.P., WRH Energy Partners, LLC, Riley-Huff Energy Group, LLC, William R. “Bill” Huff, and Rick D’Angelo sided with Longview Energy based on breach of fiduciary duty, aiding and abetting claims.
The short version of the story is that Longview Energy is a private equity backed firm with less than ten employees. The Huff companies mentioned above are all related to one of Longview’s main investors Huff Energy. That investor has two seats on the board. After Longview Energy determined opportunities in the Eagle Ford, the the two board members had Huff companies begin investing in the area through different entities. The Huff company also began leasing acreage before the Longview board ever voted whether or not to invest in the same area.
In the end, the court determined the two board members breached their fiduciary duties. The three Huff companies are required to pay over $95 million in prior revenues to Longview, all production since the June verdict, and a 5% annual post judgement interest rate.
Read more about the case at dallasnews.com