A Texas Business Court judge ruled Thursday that although Antero Resources, one of the largest U.S. suppliers of natural gas and liquefied petroleum gas, had won earlier rulings in a breach of contract lawsuit against a West Virginia pipeline owner, Stonewall Gas Gathering, Antero would take only $1 of the $200 million it asked for under a “favored shipper” provision in a gas gathering agreement.
“Antero sued asking for $200 million in damages. It is rewarding for Stonewall to have prevailed and defeated this claim by continuing to defend the case vigorously through trial,” Todd Mensing, partner at the Houston-based trial boutique Ahmad, Zavitsanos & Mensing, said in a news release.
This case was filed with the Houston division, but because of docket equalization, Judge Patrick Sweeten from the Austin division was assigned to preside over the lawsuit. The four-day bench trial before Judge Sweeten was held in Houston’s Family Law Center in January.
Antero alleged that when Stonewall entered new contracts listing lower rates with others, Antero was automatically entitled to those rates upon Stonewall’s execution of the new contracts. Stonewall argued that Antero was not entitled to an automatic reduction because Stonewall had yet to deliver gas and charge those lower rates and that Stonewall would adjust the contract rates upward to match Antero’s rate if necessary.
The 15-year contract between Antero and Stonewall was signed in 2014. Antero sued in 2024 after Stonewall signed three new contracts with what Antero alleged were lower rates, thereby, triggering an automatic reduction in Antero’s rate.
The court granted Antero’s request declaratory relief and agreed that the agreement required the automatic reduction of Antero’s service fee immediately upon the charge of a lower service fee to the third party.
“We prevailed on all of the declaratory relief we sought,” Vinson & Elkins partner James D. Thompson said.
The judge assessed Stonewall $1 in damages for not providing the new contracts under the parties’ audit provision in the gas gathering agreement when Antero originally asked for them.
“The Court declines to adopt Antero’s position that Stonewall was required to institute an automatic price reduction at the time the three affiliate contracts were executed and prior to any gas flowing or being ‘charged pursuant to the third party shipper contract.’ Those fees will ultimately be determined at the time the third party is charged a lower rate pursuant to the contract if a lower fee is billed,” Judge Sweeten wrote in his 15-page order. “Therefore, the Court denies Antero’s claim for past money damages resulting from breach of the notice term.”
While the court denied Antero’s claim for past damages, it did find Stonewall breached a section of the agreement when it entered into affiliate contracts.
“The Court finds that Stonewall breached section 9.4 of the [gas gathering agreement] when it failed to provide the affiliate contracts entered by Stonewall within 14 days of Antero’s request. Since Antero eventually received the requested materials through discovery, the Court awards $1 in nominal damages as damages for Stonewall’s breach,” Judge Sweeten wrote.
D.J. Ringquist, Nicholas Petree, Brittainie Zinsmeyer, Al Montelongo and Kelsi White of AZA also represented Stonewall.
Nicholas Shum, Brooke Noble, Margaret Eller, Winifred Anderson and Aaron Lira of Vinson & Elkins also represented Antero.
The case is Antero Resources Corporation v. Stonewall Gas Gathering LLC, 24-BC11A-0027.