Gray Reed & McGraw and White & Case are the law firms representing Occidental in its new lawsuit against Sanchez Energy over a $2.3 billion deal that Sanchez made in 2017 to acquire acreage in the Eagle Ford Shale from Anadarko.
Oxy sued Sanchez last week in a federal bankruptcy court in Houston, where Sanchez has been undergoing a Chapter 11 reorganization since last August. Oxy alleges that Sanchez failed to meet the legal obligations that it agreed to acquire in the deal. Along with the 155,000 in oil leases that Sanchez purchased, it also agreed to acquire various contracts, including pipeline and marketing agreements, that Anadarko was legally bound to. Oxy assumed all of Anadarko’s legal obligations when it acquired the company last August for $38 billion.
The lawsuit was filed by two sets of plaintiffs: 1) the “Oxy parties,” which includes a chunk of Oxy and Anadarko entities, and 2) the WES parties,” — Western Midstream Partners, WGR Operating and Springfield Pipeline, LLC — companies that were also involved in the deal.
Lawyers from White & Case’s New York, Miami and Chicago offices are representing the Oxy parties. Gray Reed represents the WES parties, and the team includes Houston restructuring partner Jason Brookner and energy litigation partners James Ormiston and Jonathan Hyman from the firm’s Houston office. Energy transactions partner Philip Jordan and bankruptcy associate Lydia Webb from Gray Reed’s Dallas office are also involved in the case.
Sanchez declined to comment on who it has retained as legal counsel and whether it had a response to the lawsuit. No one has made an appearance yet on behalf of the company on the docket. Texas lawyers from Akin Gump and Jackson Walker are representing Sanchez in its bankruptcy.
Blackstone-owned Gavilan Resources was also involved in the transaction, and has been in litigation with Sanchez since late last year as a result. Gavilan itself filed for bankruptcy in May, citing its ongoing dispute with Sanchez as one of its major financial strains.
The case number is 20-03198 in the U.S. District Court for the Southern District of Texas. The lawsuit has been assigned to U.S. Bankruptcy Judge Martin Isgur, who is also overseeing Sanchez’s Chapter 11 proceeding.