$2 M oil drilling contract in dispute

By The SE Texas Record | May 23, 2007

Ray Whitman

The Patterson-UTI Drilling Co. is seeking to recover nearly $2 million from Cavalry Resources for work it performed on two oil wells.

Patterson filed its breach of contract lawsuit with the Orange County District Court on May 21. The case has been assigned to the 260th Judicial District, Judge Buddy Hahn.

According to the plaintiff's petition, on March 22, 2006, Patterson was contracted by Cavalry to perform work on the Mil-Vid No. 7 well, at a pre-payment obligation of $900,000 plus $26,750 per day for the use of Patterson's rig.

Patterson performed its obligations under the drilling contract and was released from the well on June 8, 2006, the suit said. Three days prior to being released, Calvary negotiated an amendment to the contract to extend Patterson's operation to another oil well, the Mil-Vid No. 1.

"The amendment was executed on June 5, 2006…and Patterson performed its (bonus) obligations," the suit said. "Despite Patterson's performance under the terms of the drilling contract, Cavalry refuses to honor its financial obligations and a substantial sum remains due."

To date, $1,862,270.88 remains due, the suit said. "Cavalry agreed to pay Patterson for mobilization, drilling and other activities…but Cavalry has not paid Patterson, defaulting on the drilling contract."

The oil drilling company has also named Branta Exploration and Production as a defendant because "Branta has claimed an interest in the drilling contract and amendment, which Patterson denies," the suit said.

"Therefore, a justifiable controversy exists and all parties with an interest are before the court," the suit said. "Patterson seeks a declaration of the parties."

Patterson is suing for the un paid balance of the contract, accruing late charges and court costs.

The company is represented by Ray Whitman, attorney for the Baker & Hostetler law firm.

Case No. D070-261.c

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