Brenham Oil & Gas, Inc. v. TGS-Nopec Geophysical Co.

• Decision Date: 30 July 2015
• Docket Number: NOS. 01–13–00349–CV & 01–13–00610–CV,S. 01–13–00349–CV & 01–13–00610–CV
• Citation: 472 S.W.3d 744
• Parties: Brenham Oil & Gas, Inc., Appellant/Cross–Appellee v. TGS–NOPEC Geophysical Company, Appellee/Cross-Appellant and ENI S.p.A., Appellee
• Court: Texas Court of Appeals

472 S.W.3d 744

Brenham Oil & Gas, Inc., Appellant/Cross–Appellee

v. TGS–NOPEC Geophysical Company, Appellee/Cross-AppellantandENI S.p.A., Appellee

NOS. 01–13–00349–CV & 01–13–00610–CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued July 30, 2015

Fleming, Nolen & Jez, L.L.P., Rand P. Nolen, George M. Fleming, G. Sean Jez, Jessica A. Kasischke, Kelsey L. Stokes, for Appellant.

Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C., Sean Gorman, Jamie Alan Aycock, for Appellee.

Panel consists of Justices Massengale, Brown, and Huddle.

OPINION

Michael Massengale, Justice

Appellant Brenham Oil & Gas, Inc. filed suit against TGS–NOPEC Geophysical Company and ENI S.p.A. Brenham Oil had pursued an oil production agreement with the Republic of Togo, but it alleged those efforts failed due to the tortious interference of TGS, a company that gathers and markets seismic data for the hydrocarbon industry. ENI, an Italian oil company, was accused of aiding and encouraging TGS's tortious conduct.

ENI filed a special appearance and the claims against it were dismissed. TGS, a Delaware corporation headquartered in Houston, successfully moved to dismiss based on forum non conveniens. Brenham Oil appealed the dismissal of both parties. TGS cross-appealed arguing that the trial court also should have dismissed Brenham Oil's claims for lack of standing or want of subject matter jurisdiction over Togolese real property.

We affirm the dispositive orders of the trial court and dismiss the cross-appeal as moot.

Background

Brenham Oil & Gas, Inc. is a Texas corporation with its headquarters near Houston. The company, with its highly credentialed leadership and extensive experience in the oil-and-gas business, sought international oil-and-gas exploration investment opportunities.

In early 2010, the discovery of a large oil field off the coast of Ghana prompted Brenham Oil to investigate prospects in the waters of the neighboring country of Togo. Brenham Oil's executives, including its President, Scott Gaille, felt they were in luck: one of them was friends with an old schoolmate of the Togolese president. With the help of this well-placed friend, Brenham Oil arranged for Gaille to meet in Togo with the nation's Energy Minister as well as its Director of Hydrocarbons, Léopold Mebah Siah. The May 2010 meeting included discussion of the possibility that Brenham Oil would enter into a production-sharing contract for hydrocarbons located in an area of Togolese waters denominated "Block 2." Brenham Oil was instructed that it could obtain seismic data on Block 2 by contacting TGS–NOPEC Geophysical Company. Togo had licensed this data to TGS for the purpose of marketing it to exploration companies.

Unbeknownst to Brenham Oil, Siah had written to Roger Welch, TGS's manager for Africa, asking for information about Brenham Oil prior to Gaille's arrival in Togo. Welch, who lived and worked in London, sent the following email to Siah from his London office:

I have asked the Houston office to check on Brenham Oil & Gas also.

Brenham Oil & Gas is a very small company which has mineral rights on a permit in Texas, they do not operate; the permit is operated by Anadarko. Brenham appears to be a subsidiary of a larger company American International Industries which deals in real estate, plastic products and some well service equipment, they have no experience in either the upstream or downstream oil & gas industry.

None of the management team have any experience in the oil & gas industry.

We do not recommend that Brenham be considered for any petroleum exploration permit in Togo.

...

As I mentioned TGS is interpreting all of the data we have acquired offshore Togo and integrating this with our regional data base off Ghana and Benin.

Within a month we will have a report showing prospects offshore Togo showing their similarities with the Jubilee field offshore Ghana.

TGS is constantly talking with the serious oil companies exploring the Ghana, Togo & Benin margin, we will be showing the report to these companies and more.

At present the companies looking to make large investments in this margin are Chevron, Total, ENI Repsol–YPF, StatOilHydro etc.

Let's do a promotion to these types of companies.

After the meeting with Gaille, Siah wrote an email back to Welch:

It was a good meeting with M. Gaille from Brenham Oil & Gas company. We also the minister an[d] I noted that it si [sic] very small unexperienced company. We gave them copies of model PSA and hydrocarbon code. Also we told them to make contact with PGS [sic] for further information in terms of data evaluation and data licencing. Please can you brief us on data package price, licencing procedure and details of volume of data to be shown and licenerd [sic].

Thank you for your precious cooperation on this matter.

Behind the scenes at TGS, the news that Brenham Oil was talking to Togo about Block 2 was not welcome. Welch was part of TGS's Africa, Middle East, and Asia Pacific ("AMEAP") team and subordinate to David Hicks, the divisional vice president. Prior to answering Siah's inquiry about Brenham Oil, Welch had emailed Hicks and fellow AMEAP team member Kim Abdallah, both of whom worked in Houston. Welch wrote, "Do you know anything about Brenham Oil & Gas.... They are meeting with minister tomorrow to try and get block 2. If it is a small co. they will not buy data and try to promote block—not good for us or Togo."

Brenham Oil dispatched its vice president, L. Rogers Hardy, to examine the data located at TGS's Houston headquarters. Hardy contacted Hicks, visited TGS's Houston office, and entered into a confidentiality agreement to view the information. When Hicks reported that the "guy from Brenham" had come by inquiring about the data, Welch emailed back, "I've already told Togo not to deal with them."

On May 17, Brenham Oil learned of the negative evaluation Welch had given to Siah. Gaille responded by emailing Welch, attaching a short biography to show his competence. Gaille wrote:

I wanted to provide you with information regarding my background. Of course, you have not heard of Brenham Oil & Gas. Brenham Oil & Gas is a new vehicle that I am using to place capital in international exploration opportunities, and I am working with my network of contacts at the large oil and gas companies and governments to acquire exploration block interests. We expect to build a portfolio of approximately 10 wells over the next three years. Our goal is exposure of public and private capital to a series of high potential wells....

We would very much appreciate you and your team's support in our efforts in Togo and elsewhere, and we understand it is important that you have an accurate understanding of our background and experience. If you need a reference or have any further questions, please do not hesitate to contact me.

Four days later, Abdallah sent an email to two Houston-based TGS colleagues: AMEAP team member Juan Santana and sales representative Julie Halbison. Abdallah instructed them how to price the data for Brenham Oil, writing, "make it high."

Welch later echoed that sentiment. In an email exchange, TGS employee Jim McNeil told Welch that he could provide Hardy "a list of the wells we have when necessary" and asked him to "please let me know if you want me to do anything at this time." Welch replied, "I'll wait until he absorbs the price," noting that Brenham Oil would likely complain about it to the government. In response to a query a few days later from Halbison about pricing the data for Brenham Oil, Welch wrote, "I don't think that this is going anywhere, Brenham will not be prepared to pay anything significant to get the block. If we get a serious company I will let you guys do the pricing."

On May 24, Brenham Oil presented Togo a proposed production-sharing agreement. In June, Gaille traveled to Togo once more and held a series of meetings with officials to work out the terms of the agreement. Yair Green, an Israeli lawyer, participated on the side of the Togolese government. By July, Brenham Oil thought that it had settled on an agreement with Togo: its Board had approved the prospective agreement, and emails were exchanged about scheduling a signing ceremony in Paris. However, the parties never met in Paris and no agreement was signed. As the months went by, Gaille continued to press Green about signing the agreement. In October, Brenham Oil learned through news reports that Togo had entered an agreement to develop Block 2 with ENI S.p.A., the Italian oil company that ultimately would drill in Block 2.

ENI's investigation of exploration opportunities near Togo and negotiations for the purchase of seismic data had been underway since before Brenham Oil's initial May 2010 meeting there. As early as January 2010, TGS's AMEAP employee Sara Stephens, based in London, was communicating by email with Illiberi Leonardo, an ENI employee in Milan, promoting the sale of TGS's data to ENI. By March, Stephens was working with AMEAP employee Juan Santana, based in Houston, and TGS sales coordinator Jana Spencer, also in Houston, on finalizing a licensing agreement. In April, Stephens, who continued to communicate with Leonardo and ENI on behalf of TGS, was complaining of ENI's delay in consummating the sale. The delays were troubling to Santana and the other TGS team members.

At the end of May, Santana emphasized to his colleagues the importance of concluding the sale with ENI. In a series of emails, he wrote, "We need ENI bad!" and "FYI, WE NEED ENI ... to reach forecast. Take no prisoners .... show me the money!" Nonetheless, it was only in November 2010, after ENI had entered into a production agreement with Togo, that the sale of seismic data was completed.

Brenham Oil initially filed suit against TGS and an American ENI subsidiary, ENI Petroleum Co. Inc. However, Brenham Oil later nonsuited the subsidiary and amended its pleadings to sue the parent, ENI, S.p.A., directly. Brenham Oil alleged that TGS had tortiously interfered...