A Colorado jury has handed a $96 million win to a team of Houston lawyers from Vinson & Elkins representing Denver-based Antero Resources Corp. in a dispute over what’s believed to be one of the largest natural gas purchase agreements in the U.S.
After a two-week trial and two hours of deliberation in Denver County District Court, the jury ruled last Thursday that Washington Gas Light Company and WGL Midstream breached an agreement with Antero when they failed to purchase a set daily quantity of gas from Antero out of a gathering system in West Virginia in 2017.
Antero argued in the case that the WGL’s failure to uphold its end of the agreement forced Antero to sell the gas on the open market for significantly less than what it had negotiated to receive from WGL in their deal.
According to court documents, Antero sued in April 2017 claiming NGL refused to pay contractually-required cover damages that Antero had billed to them.
Antero and WGL entered an agreement in which Antero would deliver gas to the Marcellus Shale’s Stonewall gas gathering system for a 15-year period. The deal involved Antero paying $800 million in transportation services, which largely benefitted WGL Midstream, a 30% owner of the Stonewall gas gathering system. In return, court documents say, WGL agreed to be a long-term purchaser of gas from Antero at Stonewall.
But instead of paying the cover damages, Antero alleged, the WGL defendants sent letters to Antero arguing that Antero was delivering gas to the wrong location. According to court documents, this was a contention Antero said contradicted a January 2017 arbitration ruling that barred WGL from asserting the delivery point was anywhere other than the terminus of the Stonewall Pipeline at Braxton.
The parties got into arbitration in 2015 after WGL disputed the contractual price term, which Antero said was raised before the completion of the Stonewall system and before any gas had been delivered by Antero. The arbitration evolved into a dispute over the delivery point of the gas, which WGL lost.
In the case at hand, WGL argued they were prevented from receiving the gas at the Stonewall system due to a force majeure event at a connected pipeline system.
The jury rejected that argument, as well as WGL’s $38 million counterclaims that Antero was who did the breaching.
Attorneys for Antero and WGL did not immediately respond to requests for comment.
A team from Vinson & Elkins’ Houston office led the trial for Antero, which included partners Jim Thompson, Phillip Dye, counsel Nick Shum and Kathleen Spangler, and associates Stephanie Noble, Page Robinson and Brooke Noble. Antero’s local counsel was Michael Gallagher, Shannon Wells Stevenson and James Henderson of Davis Graham & Stubbs.
WGL’s trial team included Houston lawyer Adam Schiffer of Schiffer Hicks Johnson and Denver lawyers Frederick Bauman, Kenneth Rossman and Hermine Kallman of Lewis Roca Rothgerber Christie.