Fairways Offshore Exploration, Inc. v. Patterson Services, Inc. and Cudd Pressure Control, Inc.

CourtCourt of Appeals of Texas
DecidedJanuary 31, 2013
Docket01-11-00079-CV
StatusPublished

This text of Fairways Offshore Exploration, Inc. v. Patterson Services, Inc. and Cudd Pressure Control, Inc. (Fairways Offshore Exploration, Inc. v. Patterson Services, Inc. and Cudd Pressure Control, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fairways Offshore Exploration, Inc. v. Patterson Services, Inc. and Cudd Pressure Control, Inc., (Tex. Ct. App. 2013).

Opinion

Opinion issued January 31, 2013.

In The

Court of Appeals For The

First District of Texas ————————————

NO. 01-11-00079-CV ——————————— FAIRWAYS OFFSHORE EXPLORATION, INC., Appellant

V. PATTERSON SERVICES, INC. AND CUDD PRESSURE CONTROL, INC., Appellees

On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2007-59388

CONCURRING MEMORANDUM OPINION

I join in the Court’s opinion and specifically agree with the Court that expert

testimony is generally required to prove the standard of care for a reasonably prudent sour gas owner. But the standard of care may also be established by other

evidence in some circumstances. I write separately to address why the other

evidence offered by Patterson Services, Inc. did not establish the standard of care.

Introduction

Sour gas is a natural gas containing significant amounts of hydrogen sulfide

(H2S), a corrosive that is lethal to unprotected humans. T-95 is an H2S resistant

pipe. In late November 2006, a joint of T-95 in a sour gas well broke during

snubbing operations, causing a blowout along with damage to the pipe and other

equipment and eventually causing the well’s lessee and owner, Fairways Offshore

Exploration, Inc., to shut it down. The T-95 pipe in the well, which was known as

the Federal 1-8, was initially protected from exposure to the H2S by a “blanket” (or

“pad” or “barrier”) of nitrogen gas (which is benign to humans) that was pumped

into the well, pushing the H2S down into the well and away from the surface.

Fairways, a company with only ten employees, hired Cudd Pressure Control,

Inc. to perform snubbing services. Snubbing involves using a snubbing unit to run

pipe into and out of a well using a hydraulic workover rig while completing the

well “under pressure.” The snubbing unit was necessary because the well

contained several deviations, as it was directionally drilled. Cudd recommended

2 that Fairways lease the T-95 pipe from Patterson as the work string for Federal 1-

8.1

During the snubbing operations, a packer was set at a depth of

approximately 15,000 feet. But the setting tool that is on top of and sets the packer

would not release, causing it, along with the packer and the work string, to become

stuck. After unsuccessful attempts to pull the tool loose, Fairways instructed Cudd

to gradually increase the pull on the setting tool at 2,000 pound increments every

five minutes until its sheer pin snapped and released the tool. According to the

evidence, this is a standard procedure for attempting to release the tool. By the end

of the day, the Cudd crew was pulling with 115,000 pounds of force but the setting

tool still had not released. Fairways, at Cudd’s insistence, then shut down Federal

1-8 for the evening.

Fairways, after consulting with Baker Hughes, which had provided the

setting tool, decided to “flow the well” overnight.2 “Flowing the well” includes

evacuating the nitrogen blanket. Mario Garcia from Cudd informed Gary Knape,

Fairways’s “company man” on site, that removing the nitrogen blanket could allow

1 The work string is used to operate tools inside the well, as opposed to the pipe through which gas is produced from the well. Work strings are composed of joints of pipe. 2 “Flowing the well” reduces the pressure in the well, increases the weight on the tubing string, and causes the string to be held in tension.

3 the H2S to damage Cudd’s equipment and tubing, but Knape told Garcia that

Fairways wanted to proceed. Garcia did not argue with Knape because he “felt

comfortable with what we were going to do because our pipe was still . . . well

within its limits to pull what we were going to pull.” The removal of the nitrogen

blanket exposed the top almost 5,000 feet of the well to the H2S. The next day, the

Cudd crew continued to pull on the setting tool with increasing pounds of pressure.

After they reached 128,000 pounds of pressure, joint 18 of the T-95―which was

located at a depth of over 500 feet below ground―broke.3 The parties did not

dispute that the pipe separated due to sulfide stress cracking, which occurs as pipe

becomes brittle from exposure to H2S; sulfide stress cracking cannot occur without

exposure to H2S; and if the nitrogen blanket had not been removed, the T-95 tubing

would likely not have cracked from sulfide stress. The primary liability disputes

were whether (1) treated pipe—like the T-95—should suffer sulfide stress cracking

when it is placed in a well with a level of H2S that was “off the charts” without

leaving the nitrogen blanket around it for protection and (2) the pipe’s failure was

caused by tong marks in the pipe from prior uses that made it susceptible to sulfide

stress cracking or by the removal of the nitrogen blanket.

The jury found that Fairways’s negligence caused the blowout and awarded

Patterson, the pipe’s owner, more than $420,000. But Patterson did not present any

3 There were 499 joints of pipe with 481 joints below joint 18.

4 expert testimony that Fairways was negligent.4 The jury’s verdict necessarily

means that it concluded that Fairways was wrong—or, to use Patterson’s word,

“improvident”—in its assessment that the use of H2S resistant T-95 pipe provided

sufficient protection in itself so Fairways could safely flow Federal 1-8 and

evacuate its nitrogen blanket. In other words, Patterson established that Fairways’s

decision to remove the blanket caused the blowout. But just because Fairways’s

decision was wrong does not mean that the decision was negligent. To demonstrate

that it was negligent, Patterson had to demonstrate that Fairways failed to operate

as a reasonably prudent operator. Patterson failed to do so.

Requirement of Expert Testimony

To prevail on its negligence claim, Patterson was required to establish four

elements: 1) Fairways’s duty to act according to an applicable standard of care; 2)

a breach of the applicable standard of care; 3) an injury; and 4) a causal connection

between the breach of care and the injury. Ethicon Endo-Surgery, Inc. v. Gillies,

343 S.W.3d 205, 211 (Tex. App.—Dallas 2011, pet. denied); Fence v. Hospice in

the Pines, 4 S.W.3d 476, 478 (Tex. App.—Beaumont 1999, pet. denied). I agree

with the Court that “the proper operation of a sour gas well is not a matter within 4 Patterson’s metallurgist, Dr. Russell Kane, testified that the removal of the nitrogen blanket caused the incident; however, he was not permitted to testify that the operator was negligent in removing the blanket because he was not designated as an expert on negligence. Nor did he testify that a nitrogen blanket can never be removed or that it is common knowledge in the oil patch that a blanket cannot be removed.

5 the experience of laypersons. Specifically, whether or not the use of a nitrogen

blanket in a well, such as the one in this case, was necessary to protect the well

piping and equipment, would be unfamiliar to the ordinary person.” Slip Op. at 15.

I also agree with the Court that neither Dr. Russell Kane, a metallurgist and

member of the National Association of Corrosion Engineers (NACE) retained by

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