A legal dispute between an oil and gas company and a well drilling company has been transferred to Houston court.

As previously reported, Conquistador Petroleum filed a lawsuit April 5 in Jefferson County District Court against E&B Natural Resources Management Corp. and Francesco Galesi.

Conquistador claims it is owed hundreds of thousands of dollars because E&B failed to uphold its promise to drill three wells. 

Court records show the defendants filed motions to transfer venue, asserting the case belonged in Harris County or needed to be abated for arbitration.

On July 13 Judge Bob Wortham, 58th District Court, signed off on an amended order transferring the case to Harris County.

In its complaint, Conquistador says it spent about $4 million after acquiring seismic data for approximately 22 square miles in the North Port Acres Prospect in 2006 and 2007.

On May 1, 2008, Conquistador and E&B entered into an exploration agreement in which E&B agreed to drill three wells on the property at about 10,500 feet, according to the complaint. Galesi guaranteed E&B’s performance under the agreement, the suit states.

“Conquistador was paid $700,000 against sunk cost to be carried for 15 percent on said three wells to recoup the remaining portion of the sunk cost,” the complaint says. “Unpaid or unrecovered sunk cost would bear interest at 5 percent per annum.”

However, E&B failed to drill its first well by the Sept. 1, 2008, deadline contained within the exploration agreement, according to the complaint.

Instead of drilling three wells at 10,500 feet, E&B agreed to drill two more expensive and deeper wells, the complaint says.

Conquistador is seeking actual damages, attorney’s fees, costs, pre- and post-judgment interest and other relief the court deems just.

Bruce M. Partain of Wells, Peyton, Greenberg and Hunt in Beaumont and Stephen S. Autry of Coleman represents it.

Jefferson County Case No. E194-223

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