Parex Resources, Inc. and Ramshorn International Limited v. ERG Resources, LLC

427 S.W.3d 407, 2014 WL 295497
CourtCourt of Appeals of Texas
DecidedJanuary 28, 2014
Docket14-13-00043-CV, 14-13-00073-CV
StatusPublished
Cited by33 cases

This text of 427 S.W.3d 407 (Parex Resources, Inc. and Ramshorn International Limited v. ERG Resources, LLC) 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
Parex Resources, Inc. and Ramshorn International Limited v. ERG Resources, LLC, 427 S.W.3d 407, 2014 WL 295497 (Tex. Ct. App. 2014).

Opinion

OPINION

JOHN DONOVAN, Justice.

In trial court cause number 2012-16446, ERG Resources, LLC (“ERG”) sued Pa-rex Resources, Inc. (“Parex Canada”), Ramshorn International Limited (“Rams-horn”), and Parex Resources (Bermuda), Ltd. (“Parex Bermuda”) (collectively, “the Defendants”). In this opinion, we consider two companion interlocutory appeals stemming from the trial court’s disposition of Parex Canada’s, Ramshorn’s, and Parex Bermuda’s respective special appearances. See Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(7) (West Supp.2013) (authorizing appeal from interlocutory order that “grants or denies the special appearance of a defendant under Rule 120a, Texas Rules of Civil Procedure!)]”). In cause number 14-13-00043-CV, we (1) reverse the trial court’s order denying Parex Canada’s special appearance and render judgment dismissing for want of jurisdiction ERG’s claims against Parex Canada, and (2) affirm the trial court’s order denying Rams-horn’s special appearance and remand for further proceedings. In cause number 14-13-00073-CV, we affirm the trial court’s order granting Parex Bermuda’s special appearance, dismissing for want of jurisdiction ERG’s claims against Parex Bermuda.

I. Background

Parex Canada is a public Canadian company engaged in oil and gas production in South America and the Caribbean. Ken Pinsky is Parex Canada’s CFO. Parex Canada has several subsidiaries, including Parex Bermuda and Parex Resources (Colombia) Ltd. (“Parex Colombia”).

Ramshorn is an oil and gas company formed under Bermudian law with (1) Class A shares relating to Colombian exploration assets, and (2) Class B shares relating to an oil and gas contract in Peru. This case involves the Class A shares. Claudia Arango was the general manager of Ramshorn in Colombia.

Nabors Global Holdings II, Limited (“Nabors Global”) is a Bermudian company that owned 100% of Ramshorn’s Class A shares. Nabors Global’s parent, Nabors Industries Ltd. (“Nabors Industries”), wanted to sell all of its interests related to the exploration industry, which included Nabors Global’s ownership of the Class A shares. During the fall of 2011, the CEO of Nabors Industries, Tony Petrello, pub *413 licly announced Nabors Industries’s desire to exit the exploration industry. Jordan “Digger” Smith was head of global exploration for the Nabors entities. Smith was heavily involved in selling the Class A shares. Additionally, Scott Peterson, an employee of Nabors Corporate Services, Inc. (“Nabors Corporate”) and an attorney for one or more of the Nabors entities, was involved in selling the Class A shares.

In December 2011, Charles Dunne, COO of ERG, a Houston company, discussed the Class A shares with Smith. Dunne and Smith were friends and had previously worked together on transactions. Later that month, Arango emailed a draft presentation to Smith, who in turn forwarded the presentation to Dunne. The presentation contained, among other information, statements regarding Ramshorn’s ownership of an exploration block called “the Jag-A block.” ERG alleges this information was fraudulent.

In January 2012, 1 Dunne and other ERG personnel traveled with Smith to Colombia for a due-diligence presentation about Ramshorn. During the presentation, Ramshorn allegedly represented it held a 95% working interest in the Jag-A block, but admitted its interest was not yet recognized by the Colombian government (apparently a requirement in Colombia). However, Ramshorn allegedly represented that it had an agreement with Columbus Energy, Ltd. (“Columbus”), an entity which did hold a government-recognized 95% interest in the Jag-A block, and that it controlled Columbus. ERG alleges all these representations were false.

Later in January, ERG personnel, including Dunne, met with Smith and Peterson in Houston. During the meeting, Peterson purportedly stated that Ramshorn had “clean title” to its Colombian interests and Nabors Global controlled Columbus. Over the next few months, ERG continued to conduct due-diligence review of the Class A shares. In mid-March, Nabors 2 provided ERG access to Ramshorn’s virtual data room, whereby ERG could remotely view updated information regarding Ramshorn. The actual server housing the information was located in Texas.

In February or March, Smith contacted Royal Bank of Canada to inquire about other potential bidders for the Class A shares. Royal Bank of Canada acted as a facilitator when Nabors previously offered to sell Ramshorn’s Class A shares and certain Colombian assets wé will refer to as “the Remora assets.” 3 Parex Colombia had ultimately acquired the Remora assets, and Parex Canada had been involved in this acquisition. After Smith contacted Royal Bank of Canada in February or March, Bevin Wirzba, a person affiliated with Royal Bank of Canada, contacted Pa-rex Canada concerning the Class A shares. Wirzba thought Parex 4 might be interested because of Parex Colombia’s purchase of the Remora assets. Parex was interested and shortly thereafter retained Wirzba and Royal Bank of Canada as advisors regarding acquisition of the Class A shares.

*414 Over the next few days, Parex exchanged several communications pertaining to the Class A shares with Nabors, including non-binding letters of intent (“LOIs”) and proposed share-purchase agreements (“SPAs”). By March 7, Parex Colombia had offered to purchase the Class A shares for $50 million. Parex Canada asserts that it had no interest in purchasing the shares but was merely assisting its subsidiary Parex Colombia to make the purchase. Nabors also provided Parex access to Ramshorn’s virtual data room.

On March 9, Nabors Global entered into an SPA with ERG (“the ERG SPA”), in which ERG agreed to purchase the Class A shares for $45 million, closing at 9:00 a.m. on March 15. Ramshorn was not a party to the ERG SPA. ERG allegedly made a $3 million escrow deposit toward the purchase price. Ramshorn continued to give due-diligence information to ERG, including allowing ERG access to Rams-horn’s virtual data room.

As described in more detail below, on March 9, Nabors informed Parex that Na-bors had selected another purchaser. Pa-rex Colombia increased its offer to $55 million, but Nabors did not accept.

ERG and Nabors Global failed to close by March 15. The following day, Parex Canada personnel asked Nabors for a status update. Nabors responded that the closing date had passed but they were negotiating a new closing date. Parex Colombia then increased its offer to $75 million. However, despite the increased offer, Nabors entered into an agreement with ERG to extend the closing deadline until March 19. Nabors informed Parex Canada of this extension and that Nabors would advise Parex Canada if the deal with the counterparty failed to close.

On March 17 and 18, while continuing to conduct due diligence, ERG allegedly learned Ramshorn did not have a valid interest in the Jag-A block, Nabors Global did not control Columbus, and Ramshorn had misrepresented certain financial information. ERG raised these issues with Peterson.

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Cite This Page — Counsel Stack

Bluebook (online)
427 S.W.3d 407, 2014 WL 295497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parex-resources-inc-and-ramshorn-international-limited-v-erg-resources-texapp-2014.