ACCEPTED
02-18-00178-CV
SECOND COURT OF APPEALS
FORT WORTH, TEXAS
5/24/2018 2:13 PM
DEBRA SPISAK
CLERK
NO. 02-18-00178-CV
FILED IN
2nd COURT OF APPEALS
IN THE COURT OF APPEALS FORT WORTH, TEXAS
FOR THE SECOND DISTRICT OF TEXAS5/24/2018 2:13:01 PM
FORT WORTH, TEXAS DEBRA SPISAK
Clerk
ENERQUEST OIL & GAS, L.L.C.,
Appellant,
v.
ANTERO RESOURCES CORPORATION,
Appellee.
On Appeal from the 141st Judicial District
of Tarrant County, Texas
Trial Court Cause No. 141-290089-17
ANTERO’S RESPONSE TO
ENERQUEST’S EMERGENCY MOTION FOR TEMPORARY RELIEF
Jason R. Grill Phillip B. Dye, Jr.
State Bar No. 24002185 State Bar No. 06311500
jason.grill@steptoe-johnson.com pdye@velaw.com
STEPTOE & JOHNSON P.L.L.C. Jason M. Powers
10001 Woodloch Forest Drive, Suite 300 State Bar No. 24007867
The Woodlands, Texas 77380 jpowers@velaw.com
Telephone: (281) 203-5700 Caroline C. Stewart
Facsimile: (281) 203-5701 State Bar No. 24098477
cstewart@velaw.com
VINSON & ELKINS L.L.P.
1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
Telephone: (713) 758-2048
Facsimile: (713) 615-5766
Attorneys for Appellee
Antero Resources Corporation
TO THE HONORABLE COURT OF APPEALS:
Appellee Antero Resources Corporation (“Antero”) responds to Appellant
EnerQuest Oil & Gas, L.L.C.’s (“EnerQuest’s”) Emergency Motion for Temporary
Relief as follows.
Because EnerQuest concedes it will be participating in discovery in this case
through a Texas-based entity it purports to manage, and therefore will actually incur
the discovery expense it claims should be avoided, there is no reason to stay
discovery—especially because the emerging facts are already showing additional
jurisdictional contacts that EnerQuest sought to avoid revealing below. The only
effect of the stay EnerQuest seeks would be to facilitate gamesmanship with respect
to EnerQuest’s admitted obligation to continue responding to merits discovery on
behalf of Braxton Minerals III, the Texas-based entity it manages.
Procedural Background
In pertinent part, this case concerns the theft of trade secrets belonging to
Antero. Antero alleges that certain defendants below participated in a scheme to
acquire confidential information about Antero’s oil-and-gas well-drilling activities
from at least two individuals associated with a Fort Worth-based company providing
landman and other title-related services to Antero.
On March 9, 2018, Antero filed an amended petition in this case adding
multiple defendants, including EnerQuest and Braxton Minerals III, LLC.
1
EnerQuest, an Oklahoma-based company, owns 75% of the membership interest in
Braxton Minerals III, a limited liability company with its principal place of business
in Fort Worth. Braxton Minerals III holds oil and gas properties that appear to have
been targeted for acquisition on the basis of Antero’s non-public information.
Braxton Minerals III’s acquisition of these properties was funded by EnerQuest, who
in 2015 had reached out to Texas to enter into a business relationship with the other
member of Braxton Minerals III—a Fort Worth-based entity called Braxton
Minerals-Appalachia (“BMA”)—and the two Fort Worth residents who were
principals of BMA, all of whom are also defendants below. EnerQuest contends that
it is the managing member of Braxton Minerals III.1
On April 18, 2018, EnerQuest filed a special appearance denying that it was
subject to personal jurisdiction in Texas. In that special appearance, EnerQuest
admitted that it had searched its files and found confidential Antero documents
received from one of BMA’s principals, a resident of Fort Worth. See Ex. A at 6-7.
These documents had been requested by EnerQuest in emails sent to Texas, as
explained in Antero’s answer to the special appearance. See Ex. B.
On April 25, 2018, Antero served jurisdictional discovery on EnerQuest
seeking to establish the scope of EnerQuest’s relevant contacts with Texas for
1
A defendant below has called into question whether the formation of Braxton Minerals
III was fraudulent. Antero takes no position on that issue at this time, but assumes for purposes of
this motion that EnerQuest is, as it claims to be, the managing member of Braxton Minerals III.
2
purposes of responding to EnerQuest’s special appearance. See Ex. B-4. The day
after receiving these discovery requests, EnerQuest gave notice that the District
Court would hear its special appearance on May 9, 2018. See Ex. C.
On April 30, 2018, Braxton Minerals III filed an answer and generally
appeared. See Ex. D. As expected, given that EnerQuest had already admitted in its
special appearance that it had “removed Braxton Minerals-Appalachia as Manager
of Braxton Minerals III and appointed itself as Manager of that company,” see Ex.
A at 6, Braxton Minerals III’s answer was filed by EnerQuest’s counsel, see Ex. D.
On May 1-2, 2018, Antero requested that EnerQuest agree to a continuance
of the special appearance hearing to allow for limited jurisdictional discovery to
proceed before the special appearance was decided. EnerQuest refused the request.
Therefore, on May 2, 2018, Antero filed its response identifying those Texas
contacts of which Antero was already aware, along with an alternative motion for
continuance to obtain answers to the outstanding jurisdictional discovery requests
and conduct further jurisdictional discovery as needed. See Ex. B.
On May 11, 2018, the District Court denied EnerQuest’s special appearance,
evidently concluding that specific personal jurisdiction over EnerQuest was already
established without the need for further discovery. See Ex. E.
3
ARGUMENT
EnerQuest argues for a stay of discovery to avoid expense and avoid deciding
claims that may not be subject to personal jurisdiction. But as EnerQuest concedes,
it will bear the expense of discovery in any event; and Texas law already prevents
any risk that claims will be decided while EnerQuest’s appeal pends. In this Court,
EnerQuest is merely doing what it did below: trying to avoid any inquiry whatsoever
into jurisdictional facts.
I. Because EnerQuest will remain in this litigation under another name, it
faces no additional expense or inconvenience from continuing in
discovery.
EnerQuest’s primary argument is that it will suffer “substantial expense and
inconvenience” from participating in discovery in Fort Worth. Motion at 4. But
EnerQuest does not explain what expense or inconvenience it will suffer. Indeed, it
does not explain why it will suffer any expense or inconvenience from participating
in discovery in the name of EnerQuest, since it intends to participate in discovery in
the name of Braxton Minerals III, the Texas-based entity it owns and on whose
behalf it answered without contesting jurisdiction at all. Given that EnerQuest
contends it is the sole manager of Braxton Minerals III, EnerQuest’s position is that
it is the only entity capable of producing Braxton Minerals III’s documents,
answering interrogatories on its behalf, or designating corporate representatives for
its testimony.
4
Indeed, EnerQuest has conceded that it will continue to participate in
discovery. Just two days ago, counsel for EnerQuest asked that Antero consent to
stay discovery as to EnerQuest, explaining that EnerQuest would continue to
participate in discovery as the manager of Braxton Minerals III:
We intend to answer the discovery for BMIII and continue
to participate in the discovery of the case, as well as
produce any documents EnerQuest has in relation to
BMIII, Bauer and Ashburn through BMIII.
See Ex. F.
EnerQuest cites no authority for the proposition that discovery should be
stayed during the appeal of a special appearance when that discovery imposes no
meaningful additional costs on the defendant. As reflected in each case EnerQuest
cites, courts stay discovery during the appeal of a special appearance only when the
requested discovery would impose a significant burden and expense on the specially
appearing party. In Oryx Capital International, Inc. v. Sage Apartments, L.L.C., the
appellate court granted a stay so that Oryx could avoid “the expense and
inconvenience of discovery pending the resolution of this appeal.” 167 S.W.3d 432,
437 (Tex. App.—San Antonio 2005, no pet.). Again, in Lattin v. Barrett, the court
“expressed concern for an appellant challenging the denial of a special appearance
having to incur the expense and inconvenience of discovery pending resolution of
the appeal of a special appearance.” 127 S.W.3d 276, 277 (Tex. App.—Waco 2003,
no pet.). And finally, in Lacefield v. Elec. Fin. Grp., Inc., the court stayed discovery
5
on the sole basis of burden and expenses, stating: “Lacefield should not be required
to submit to ‘the expense and inconvenience’ of discovery pending resolution of his
appeal.” 21 S.W.3d 799, 800 (Tex. App.—Waco 2000, no pet.).
Although burden and expense may be a valid basis on which to stay discovery
in some cases, this issue has no weight here, where EnerQuest will be participating
in discovery on behalf of Braxton Minerals III. EnerQuest has not explained how
responding on behalf of itself would impose any measurable additional burden that
would support a stay of discovery.
Moreover, EnerQuest faces no special burden from participating in discovery
in Texas. Based in Oklahoma City, EnerQuest has convenient access to Fort Worth,
and because EnerQuest operates oil and gas wells in Texas, is registered to do
business in Texas, and has an agent for service of process in Texas (see Ex. A at 4),
it has already demonstrated that it has no serious objection to litigating in Texas.
II. The automatic trial stay obviates any risk of a merits disposition that
would affect EnerQuest’s substantial rights pending appeal.
EnerQuest next contends that “the parties risk litigating claims … that must
be dismissed” if it prevails on its jurisdictional appeal. Motion at 4. Not so. First,
Texas statute is clear that an interlocutory appeal of an order denying a special
appearance stays “the commencement of a trial” during the appeal. TEX. CIV. PRAC.
& REM. CODE § 51.014(b). As such, the District Court will not decide the outcome
of the case while the appeal pends. But otherwise, the District Court retains
6
jurisdiction over the case during the interlocutory appeal and may proceed with all
other matters. “Section 51.014(a)(7) provides that an interlocutory appeal may be
brought after the denial of a special appearance, but the statute does not provide a
stay of anything but the trial pending resolution of the appeal,” in contrast to appeals
under Subsection (a)(3), (5), (8), or (12). Buswell v. The GWSPI Co., LLC, 511
S.W.3d 256, 257 (Tex. App.—San Antonio 2015, no pet.) (citing § 51.014(a)(7),
(b)). An appellant therefore bears the burden of showing why Section 51.014(a)
should be extended to discovery when they appeal under Section 51.014(a)(7).
EnerQuest has not carried its burden.
Second, even in the unlikely event EnerQuest were to prevail on its appeal, it
is far from clear this case would be dismissed. Because EnerQuest demanded a
hearing on its special appearance before any jurisdictional discovery, even a reversal
of the District Court’s decision could merely result in a remand to the District Court
to allow jurisdictional discovery exploring the EnerQuest contacts with the other
Texas defendants that the evidence has already revealed in part.
III. EnerQuest is attempting to take strategic advantage of its refusal to
participate in jurisdictional discovery in the district court.
EnerQuest fought ordinary jurisdictional discovery below, and its current
motion appears designed to prevent the development of facts that could quickly
resolve the jurisdictional issues on remand if necessary. As explained in the
proceedings below, the District Court had discretion to permit discovery on a special
7
appearance. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex.
2002); Barron v. Vanier, 190 S.W.3d 841, 847 (Tex. App—Fort Worth 2006, no
pet.). Such commonplace discovery could easily have been allowed if it were
necessary. But after EnerQuest insisted it had no relevant Texas contacts, Antero
submitted clear evidence to the District Court that EnerQuest had reached out to
Texas to obtain confidential information. In addition, since the time of the special
appearance hearing, one of the BMA principals has testified in deposition that
EnerQuest’s president and another EnerQuest employee actually came to Texas for
an October 2015 meeting with the two BMA principals to discuss investing in
Braxton’s mineral acquisition program, right before Braxton Minerals III was
formed in November 2015 and acquired the allegedly tainted properties.2
In the court below, EnerQuest sought to avoid answering discovery that would
have revealed that Texas contact, and EnerQuest’s motion in this Court appears
intended to continue the strategy of seeking a decision on the special appearance
without allowing the development of any fact record regarding its Texas contacts.
This Court need not facilitate EnerQuest’s strategic approach. Allowing ordinary
discovery to continue may reveal facts that will further solidify personal jurisdiction
over EnerQuest and possibly lead EnerQuest to abandon its appeal.
2
See Ex. G (excerpt from deposition of Robert Scott Bauer) at 121-22. Because the
Bauer deposition took place less than ten days ago, a final transcript has not been completed.
Therefore, an excerpt of the “rough” draft transcript received from the reporter is attached.
8
Indeed, the strategic value of this stay to EnerQuest is likely its only real value.
Given that EnerQuest will be participating in discovery under the name of Braxton
Minerals III, the only practical impact of a stay of discovery would be to give
EnerQuest a fig-leaf reason to selectively respond to discovery, i.e., a license to
refuse to answer discovery requests and deposition questions about its activities in
Texas. This selective responsiveness would be wasteful, as it makes no sense for an
EnerQuest witness giving a deposition as a Braxton corporate representative to
refuse to answer questions about EnerQuest’s visits to Texas. More troublingly still,
EnerQuest could use the discovery stay to delay or limit the inquiry into the merits
of the case against Braxton Minerals III, by choosing to disclose whatever facts it is
comfortable disclosing, and then asserting that any inconvenient questions encroach
on the subject of EnerQuest’s contacts with Texas—contacts which may well prove
central to the manner in which Antero’s confidential information was solicited,
disclosed, and used by multiple individuals and entities. Because the discovery stay
would do nothing to avoid any expense or burden, there is no reason to risk entering
a stay that could potentially be misused and abused.
PRAYER
Appellee Antero Resources Corporation respectfully requests that this Court
deny EnerQuest’s Motion for Temporary Relief. Antero further requests the Court
grant it such additional and further relief to which it may show itself entitled.
9
Respectfully submitted,
STEPTOE & JOHNSON P.L.L.C.
By: /s/Jason R. Grill
Jason R. Grill
State Bar No. 24002185
jason.grill@steptoe-johnson.com
W. Henry Lawrence
WV State Bar No. 2156
10001 Woodloch Forest Drive, Suite
300
The Woodlands, Texas 77380
281.203.5700
281.203.5701 (facsimile)
VINSON & ELKINS L.L.P.
By: /s/Jason M. Powers
Phillip B. Dye, Jr.
State Bar No. 06311500
pdye@velaw.com
Jason M. Powers
State Bar No. 24007867
jpowers@velaw.com
Caroline C. Stewart
State Bar No. 24098477
cstewart@velaw.com
1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
713.758.2222
713.758.2346 (facsimile)
Attorneys for Appellee
Antero Resources Corporation
10
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has
been forwarded to all parties listed below via E-service and/or via facsimile, on this
the 24th day of May, 2018:
Via E-Service: Via E-Service:
ghamm@hammfirm.com apennington@phblaw.com
Gene A. Hamm, II H. Allen Pennington, Jr.
The Hamm Firm Matthew D. Germany
1333 W. McDermott, Suite 200 Pennington Hill, LLP
Allen, Texas 75013 Tindall Square – Warehouse No. 3
Attorney for Plaintiff, Penn 509 Pecan Street, Suite 101
Investment Funds, LLC and New Fort Worth, Texas
Defendants Venture Strong II, LLC and Attorneys for Defendants John Bradley
Joe F. Penn Jr. Ashburn and New Defendant Post Oak
Appalachia, LLC
Via E-Service: Via E-Service:
mhassett@tarrantbusinesslaw.com awoodward@hrepc.com
Michael Hassett C. Andrew Woodward
Jones Hassett, PC Holman Robertson Eldridge
440 North Center 8226 Douglas Ave., Suite 550
Arlington, Texas 76011 Dallas, Texas 75225
Attorney for Defendants Michael Attorney for Kelly O’Connor
Fisher, Maegan Fisher and M&M
Consulting
Via E-Service: Via E-Service:
Scott@braxtonenergy.com brad@postoakroyalty.com
R. Scott Bauer Brad Ashburn
8851 Camp Bowie Boulevard W 100 N. Forest Park Blvd., Suite 201
Suite 200 Fort Worth, Texas 76102
Fort Worth, Texas 76116 Attorney for Braxton Minerals-
Attorney for Braxton Acquisitions, Appalachia, LLC
LLC; Braxton Energy, LLC; Braxton
Minerals II, LLC; and R. Scott Bauer
11
Via E-Service: Via E-Service:
rolandjohnson@hfblaw.com joe.cox@bracewell.com
Roland K. Johnson Joseph M. Cox and Andrea D. Broyles
Harris, Finley & Bogle, PC 1445 Ross Avenue, Suite 3800
777 Main Street, Suite 1800 Dallas, Texas 75202
Fort Worth, Texas 76102 Spencer F. Smith
Attorney for Energy Corporation of McAfee & Taft
America 211 N. Robinson Ave.
Oklahoma City, Oklahoma 73102.
Attorneys for EnerQuest Oil & Gas,
L.L.C. and Braxton Minerals III, LLC
Via E-Service: Via E-Service: cd@peebleslaw.com
jnt@turnerandallen.com C.D. Peebles
Jess N. Turner, III The Peebles Law Firm
Turner & Allen, P.C. 1604 Devon Court
P.O. Box 930 Southlake, TX 76092
Graham, Texas 76450 Attorney for Austin Fox
Attorney for Turn 2 Energy, LLC
/s/ Caroline C. Stewart_________________
CAROLINE C. STEWART
12
EXHIBITS
Ex. A Special Appearance of Defendant EnerQuest Oil & Gas, L.L.C. to Object to
Personal Jurisdiction
Ex. B Intervenor Antero Resources Corporation’s Response to EnerQuest Oil & Gas
L.L.C.’s Special Appearance and Motion to Continue
Ex. C Notice of Hearing on EnerQuest Oil & Gas, L.L.C.’s Special Appearance to Object
to Personal Jurisdiction
Ex. D Defendant Braxton Minerals III, LLC’s Special Exceptions and Original Answer
Ex. E Order Overruling Objection to Jurisdiction
Ex. F Cox Email re: Discovery Stay
Ex. G Robert Scott Bauer Deposition Excerpts
US 5684346v.1
EXHIBIT A
141-290089-17
FILED
TARRANT COUNTY
4/18/2018 2:57 PM
THOMAS A. WILDER
CAUSE NO. 141-290089-17 DISTRICT CLERK
PENN INVESTMENT FUNDS, LLC, ) IN THE DISTRICT COURT OF
Plaintiff, )
)
ANTERO RESOURCES CORPORATION, )
Intervenor, ) TARRANT COUNTY, TEXAS
)
vs. )
)
BRAXTON ENERGY, LLC, et al., )
Defendants. ) 141ST JUDICIAL DISTRICT
SPECIAL APPEARANCE OF DEFENDANT ENERQUEST OIL & GAS, L.L.C.
TO OBJECT TO PERSONAL JURISDICTION
TO THE HONORABLE JUDGE OF SAID COURT:
Defendant EnerQuest Oil & Gas, L.L.C. (“EnerQuest”) files this special appearance under
Rule 120a of the Texas Rules of Civil Procedure for the sole purpose of objecting to the personal
jurisdiction of this Court over EnerQuest. EnerQuest’s special appearance is being made prior to
the filing of a motion to transfer venue, answer, or any other plea, pleading or motion on
EnerQuest’s behalf. For the reasons that follow, the Court should dismiss the claims asserted
against EnerQuest for lack of personal jurisdiction.
I. Summary of the Argument
Defendant EnerQuest is not subject to personal jurisdiction in the State of Texas in this
case. There are two types of personal jurisdiction: general and specific. Neither type of personal
jurisdiction exists against EnerQuest under the circumstances here. EnerQuest is not subject to
general or “all purpose” jurisdiction in the State of Texas because it is organized under the laws of
and maintains its principal place of business in Oklahoma, not Texas. See Daimler AG v. Bauman,
571 U.S. 117, 134 S. Ct. 746, 760-61 (2014) (holding that foreign corporations only subject to
general jurisdiction when “at home” in forum, such as when the forum is the defendant’s state of
#5680198
incorporation or principal place of business). Additionally, EnerQuest is not subject to specific
jurisdiction in the State of Texas in this case because none of Antero’s actions asserted in this case
arise out of any activity by EnerQuest that was intentionally or purposefully directed at the State
of Texas. See Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County,
137 S. Ct. 1773, 1780 (2017). Therefore, this Court lacks personal jurisdiction over EnerQuest and
this case should be dismissed as to EnerQuest.
II. Background
A. Summary of Relevant Portions of Antero’s Amended Petition in Intervention and Its
Claim Against EnerQuest. 1
This case concerns the alleged misappropriation by other Defendants of certain of Antero’s
alleged trade secrets. Antero contends that a “Critical Date Report,” a “SWN June 2016
Acquisition Defects report,” and certain “Title Opinions” that pertain to oil and gas minerals
located in West Virginia are its confidential trade secrets. Am. Pet. Interv. ¶¶ 22-28. Antero alleges
that at some point in 2015 and 2016, one or more of the “Original Defendants” and New Defendant
Austin Fox unlawfully acquired these alleged trade secrets from non-party Texhoma Land
Consultants I Inc. in Tarrant County, Texas. 2 Id. ¶¶ 22, 29. Antero also alleges the aforementioned
1
Due to the pre-answer stage of this case vis-à-vis EnerQuest, the following summary assumes
well-pleaded allegations in the amended petition are true unless such facts are specifically
controverted by evidence below and attached hereto. Nothing contained herein should be construed
as an admission or concession that Antero’s allegations are in fact correct.
2
The “Original Defendants” are Braxton Energy, LLC; Braxton Acquisitions, LLC; Braxton
Minerals II, LLC; Robert Scott Bauer; John Bradley Ashburn; Michael and Maegen Fisher; M&M
Consulting,; and Kelly O’Connor. Am. Pet. Interv. ¶¶ 3-9.
The “New Defendants” are Austin Fox; Joe F. Penn, Jr.; EnerQuest; Venture Strong II, LLC; Post
Oak Appalachia, LLC; Turn 2 Energy, LLC; Braxton Minerals-Appalachia, LLC; Braxton
Minerals III, LLC; and Global Oil and Gas Fields Oklahoma, LLC. Id. ¶¶ 10-18.
2
#5680198
Defendants, Plaintiff Penn Investment Funds, LLC, and New Defendant Joe F. Penn, Jr. conspired
to misappropriate Antero’s trade secrets. Id. 29, 50-54.
Next, Antero contends that Original Defendant Braxton Minerals II, LLC used the
allegedly misappropriated trade secrets to acquire oil and gas interests in West Virginia that were
“adverse” to Antero’s interests, and that Braxton Minerals II subsequently transferred its allegedly
ill-gotten mineral interests to New Defendant Braxton Minerals III, LLC and certain other
Defendants (but not EnerQuest). Id. ¶ 40. Antero further alleges that Braxton Minerals III is owned
by EnerQuest and New Defendant Braxton Minerals-Appalachia, LLC, and that the latter entity is
in turn owned by Original Defendants Robert Scott Bauer and John Bradley Ashburn, two of the
alleged conspirators. Id. ¶ 42.
Other than its allegation that EnerQuest is one of the members of Braxton Minerals III, the
only allegations in the amended petition directed at EnerQuest are that (i) EnerQuest claims to
have removed and replaced Braxton Minerals-Appalachia as the manager of Braxton Minerals III,
and (ii) as the manager of Braxton Minerals III, EnerQuest has offered West Virginia oil and gas
properties owned by Braxton Minerals III for sale, certain of which properties Antero claims were
acquired by other Defendants using the misappropriated trade secrets. Id. ¶ 44, 46. Antero’s
amended petition does not allege that EnerQuest played any part in misappropriating the alleged
trade secrets. More importantly, the amended petition does not allege EnerQuest took any actions
within or directed at the State of Texas. As will be shown below, Antero’s claims do not arise out
of any contact of EnerQuest within the State of Texas.
B. Summary of EnerQuest’s Relevant Operations.
EnerQuest is an oil and gas exploration and production company that is organized as a
limited liability company under the laws of the State of Oklahoma, and it maintains its headquarters
3
#5680198
at 12368 Market Drive, Oklahoma City, Oklahoma 73114. Affidavit of Gregory Olson, ¶ 3
(attached as Exhibit 1). EnerQuest operates oil and gas wells in Oklahoma, Texas, Louisiana, Utah,
and Arkansas. Id. ¶ 4. In addition, EnerQuest owns non-operated oil and gas interests in Alabama,
Arkansas, Florida, Georgia, Illinois Louisiana, Michigan, Mississippi, Nebraska, North Dakota,
New Mexico, Oklahoma, Oregon, Pennsylvania, Texas, West Virginia, and Wyoming. Id.
Although EnerQuest is registered to and does conduct business in the State of Texas, it maintains
no offices or employees in Texas. Id. ¶ 3. Oklahoma is the only state in which EnerQuest maintains
an office and employees. Id.
Relevant here, EnerQuest and Braxton Minerals-Appalachia formed Braxton Minerals III,
a Delaware limited liability company, in November 2015. Id. ¶ 5. Braxton Minerals III was
organized for the express purpose of acquiring, owning, holding, and maintaining certain types of
oil and gas interests in the States of West Virginia, Pennsylvania, and Ohio. See Limited Liability
Company Agreement of Braxton Minerals III, LLC §§ 1.3, 2.1(a) (“BMIII Agreement” attached
as Exhibit 1A).
Generally, Braxton Minerals III was organized such that EnerQuest owns 75% of the equity
interest in the company and Braxton Minerals-Appalachia owns 25% of the equity interest in the
company. BMIII Agreement, § 3.6 & Exhibit A. Braxton Minerals-Appalachia was designated as
the initial Manager of the company, id. § 6.1(b), was responsible for conducting its day-to-day
operations, id. § 6.5(a), and was responsible for funding its day-to-day operations and expenses,
id. § 4.1(c). EnerQuest, for its part, committed to contribute up to $10 million in capital to Braxton
Minerals III in order to acquire certain oil and gas interests located in West Virginia, Pennsylvania,
or Ohio that were identified by the Manager as meeting certain agreed-upon criteria. See id. §
4
#5680198
4.1(a), (b), & Exhibit A. Prior to the Liquidity Event described below, EnerQuest did not exercise
control over or participate in management activities of Braxton Minerals III.
The first mineral interests acquired by Braxton Minerals III were purchased from Original
Defendant Braxton Minerals II contemporaneously with the formation of Braxton Minerals III in
November 2015. See id. § 4.1(a). These “Previously Acquired Interests” were composed of 214.40
net mineral acres located in West Virginia. See id. § 4.1; Olson Affidavit, ¶ 6. Braxton Minerals-
Appalachia represented to EnerQuest at the time Braxton Minerals III was formed that the
Previously Acquired Interests had been fully paid for by Braxton Minerals-Appalachia or its
affiliates, and that such interests met certain other characteristics that fit with the package of
mineral interests to be purchased by Braxton Minerals III. See BMIII Agreement § 4.1(a)(i).
EnerQuest did not have any involvement in the initial acquisition of the Previously Acquired
Interests by Braxton Minerals II, Braxton Minerals-Appalachia, or any of their managers, owners,
or affiliates. Olson Affidavit, ¶ 6.
Between November 2015 and April 2016, EnerQuest fully funded its $10 million capital
commitment to Braxton Minerals III, which funds were used by Braxton Minerals III to purchase
certain oil and gas interests in West Virginia and Pennsylvania. Olson Affidavit, ¶ 7. By letter
dated March 10, 2016 from Brad Ashburn, Braxton Minerals-Appalachia notified EnerQuest
pursuant to Section 4.5 of the BMIII Agreement that EnerQuest’s remaining commitment amount
was less than $1 million and requested that EnerQuest elect whether it would contribute additional
capital. Olson Affidavit, ¶ 8; March 10, 2016 Ltr. (attached as Exhibit 1B). Under the BMIII
Agreement, EnerQuest then had 30 days to decide whether to commit to contribute another $10
million in capital to Braxton Minerals III, or Braxton Minerals-Appalachia was obligated to
liquidate Braxton Minerals III. See BMIII Agreement, § 4.5. Ultimately, EnerQuest elected not to
5
#5680198
increase its capital contribution commitment to Braxton Minerals III, which triggered a “Liquidity
Event” under Section 10.1 of the BMIII Agreement. Olson Affidavit, ¶ 8; Email of April 8, 2016
(attached as Exhibit 1C).
As a result of the Liquidity Event, Braxton Minerals-Appalachia was supposed to select a
liquidator, to be approved by EnerQuest, to wind up the affairs of Braxton Minerals III and
distribute its assets to EnerQuest and Braxton Minerals-Appalachia as provided in the BMIII
Agreement. See BMIII Agreement, § 10.2. However, Braxton Minerals-Appalachia failed or
refused to do so. Olson Affidavit, ¶ 9. By letter dated August 9, 2017, EnerQuest notified Braxton
Minerals-Appalachia that it was in breach of the BMIII Agreement by, among other things, failing
to select a liquidator to wind the company up, and demanded that Braxton Minerals-Appalachia
cure such breach before September 10, 2017. Olson Affidavit, ¶ 10; Aug. 9, 2017 Ltr. (attached as
Exhibit 1D). Braxton Minerals-Appalachia failed and refused to cure its breach within the
specified time period, so EnerQuest removed Braxton Minerals-Appalachia as Manager of
Braxton Minerals III and appointed itself as Manager of that company on September 29, 2017, as
allowed in the BMIII Agreement. Olson Affidavit, ¶¶ 10-11; Written Consent of Members of
Braxton Minerals III, LLC dated Sept. 29, 2017 (attached as Exhibit 1E); Sept. 29, 2017 Ltr.
(attached as Exhibit 1F).
Subsequently, in February 2018, Antero’s counsel notified EnerQuest’s counsel that it
believed Original Defendants Robert Scott Bauer and John Bradley Ashburn had possession of
certain of its alleged trade secret documents and inquired as to whether EnerQuest had possession
of certain specified documents. Feb. 23, 2018 Ltr. (attached as Exhibit 2). In response, EnerQuest
searched its files, determined that it had received certain information from Original Defendant
Robert Scott Bauer that Antero alleges are its trade secret documents, and so notified Antero. Olson
6
#5680198
Affidavit, ¶ 12; Email of March 5, 2018 from J. Black to H. Lawrence (attached as Exhibit 3). As
EnerQuest’s counsel previously explained to Antero’s counsel (and were evidenced by the emails
and text messages previously provided to Antero), such documents were disclosed to Greg Olson
of EnerQuest by Bauer in February 2017 or later in the course of Bauer’s effort to solicit EnerQuest
to invest in another of Bauer’s mineral acquisition programs. Olson Affidavit, ¶ 13; March 5, 2018
Email. EnerQuest did not know that Bauer allegedly acquired the subject information by unlawful
means. Olson Affidavit, ¶ 13. In any event, the alleged trade secret information was received by
Greg Olson of EnerQuest in Oklahoma. Id. EnerQuest has not disclosed the documents to anyone
outside of its organization other than Original Defendants Bauer and Ashburn. Id.
III. Argument and Authorities
“The plaintiff bears the initial burden of pleading allegations that suffice to permit a court’s
exercise of personal jurisdiction over the nonresident defendant.” Searcy v. Parex Res., Inc., 496
S.W.3d 58, 66 (Tex. 2016). If the plaintiff does so, the burden shifts to the defendant to negate the
“bases for personal jurisdiction that exist in the plaintiff’s pleadings.” Id. The Texas legislature,
through its long-arm statute, has authorized Texas courts to exercise personal jurisdiction over
nonresidents to the limits allowed by the Due Process Clause of the Fourteenth Amendment to the
United States Constitution. See id. (citing Moki Mac River Expeditions v. Drugg, 221 S.W. 3d 569,
574 (Tex. 2007)). As a result, the question of whether Texas courts may exercise personal
jurisdiction over a nonresident is coextensive with whether the exercise of that jurisdiction
comports with due process. See id. Thus, the present inquiry is whether EnerQuest has sufficient
minimum contacts with the State of Texas “such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310,
316 (1945) (quotation omitted).
7
#5680198
There are two categories of personal jurisdiction: general and specific. General jurisdiction
is “all-purpose jurisdiction” where the defendant can be sued in the forum state regardless of
whether the plaintiff’s cause of action relates to the defendant’s contacts with the forum. Daimler
AG v. Bauman, 134 S. Ct. 746, 754 (2014). Specific jurisdiction, on the other hand, allows
jurisdiction only over claims that arise out of or relate to a defendant’s contacts with the forum
state. See id. For the reasons discussed below, EnerQuest does not have sufficient minimum
contacts with Texas to support either general or specific jurisdiction in this case. Therefore, the
Court should dismiss EnerQuest from this case for lack of personal jurisdiction.
A. EnerQuest is not subject to general personal jurisdiction in Texas.
Until relatively recently, some courts had interpreted the United States Supreme Court’s
precedent as authorizing general personal jurisdiction in any forum with which the defendant had
substantial, “continuous and systematic contacts.” Cf. Moki Mac River Expeditions, 221 S.W.3d
at 575 (suggesting that general jurisdiction is present merely when a “defendant has made
continuous and systematic contacts with the forum.”). Recently, however, the Supreme Court has
rejected that view of general jurisdiction and held that it “is unacceptably grasping.” Daimler, 134
S. Ct. at 761. Instead, the Supreme Court has emphasized “that only a limited set of affiliations
with a forum will render a defendant amendable to all-purpose jurisdiction there.” Id. at 760. For
individuals, that place is the defendant’s domicile. Id. For corporations, “the place of incorporation
and place of business are [the] paradigm bases for general jurisdiction.” Id. (quotation omitted).
In Daimler, the Supreme Court held that general jurisdiction comports with due process
only when a “corporation’s ‘affiliations with the State are so continuous and systematic as to render
it essentially at home in the forum State.’” Id. (quoting Goodyear Dunlop Tires Operations, S.A.
v. Brown, 564 U.S. 915, 919 (2011) (emphasis added)). In explaining why a corporation’s principal
8
#5680198
place of business and state of incorporation are the paradigm examples of the “limited set of
affiliations” that render a corporation at home, the Supreme Court analogized those locations to an
individual’s domicile and indicated they were the corporation’s functional “equivalent” to an
individual’s domicile. To be sure, the Supreme Court in Daimler left open the possibility that in
“an exceptional case” a corporation might be deemed to be at home in a state other than its state
of incorporation or principal place of business. Id. at 761, n.19. However, the Court emphasized
that the character of affiliations necessary to render a defendant at home in a state should be
“unique” and “easily ascertainable,” like an individual’s domicile, or a corporation’s principal
place of business and state of incorporation. See id. at 760.
Underscoring the point that the place where a corporation is deemed to be at home should
be “unique” and “easily ascertainable,” the Court in Daimler rebuffed the dissent for suggesting
that its holding would invite additional jurisdictional discovery as to the quantum of contacts
necessary to establish general jurisdiction. See id. at 761, n.20 (“But it is hard to see why much in
the way of discovery would be needed to determine where a corporation is at home.”). Thus, it
should come as no surprise that lower courts after Daimler have consistently rejected attempts to
expand general jurisdiction over corporations to states other than the corporation’s principal place
of business or state of incorporation. See, e.g., Sonera Holding B.V. v. Cukurova Holding A.S., 750
F.3d 221, 223 (2d Cir. 2014) (per curiam) (stating “general jurisdiction extends beyond an entity’s
state of incorporation and principal place of business only in the exceptional case . . .” (emphasis
added)); Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir. 2014) (“It is, therefore,
incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation
or principal place of business.” (emphasis added)); Wal-Mart Stores, Inc. v. LeMaire, 395 P.3d
1116, 1122 (Ariz. Ct. App. 2017) (holding that an “exceptional case” where general jurisdiction
9
#5680198
would extend beyond the paradigm examples identified by the Supreme Court requires “exigent
circumstances that render traditional jurisdictional limits unworkable.” (emphasis added)).
EnerQuest is “at home” for purposes of general jurisdiction only in Oklahoma, not Texas.
Oklahoma is where EnerQuest is organized. Oklahoma is where EnerQuest maintains its
headquarters and its employees. Thus, Oklahoma is the place from where EnerQuest directs its
business in multiple states. EnerQuest does not maintain an office or employees in any state other
than Oklahoma. As a result, Oklahoma is the only “unique” and “easily ascertainable” place that
is equivalent to EnerQuest’s domicile. As a result, Oklahoma is the only state in which EnerQuest
is subject to general, “all purpose” jurisdiction untethered to its contacts with the forum. While
EnerQuest conducts business in the State of Texas, it also conducts business in other states. The
Supreme Court has made clear that doing substantial business in a state is not enough to confer
general jurisdiction because “[a] corporation that operates in many places can scarcely be deemed
at home in all of them.” Daimler AG, 134 S. Ct. 761, n.20. Therefore, EnerQuest is at home and
subject to personal jurisdiction in only Oklahoma, not in Texas.
B. EnerQuest is not subject to specific personal jurisdiction in Texas in this case.
“In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate
to the defendant’s contacts with the forum.” Bristol-Myers Squibb Co. v. Superior Court of
California, San Francisco County, 137 S. Ct. 1773, 1780 (2017) (quotations and alterations
omitted). This requires “an affiliation between the forum and the underlying controversy,
principally, an activity or an occurrence that takes place in the forum State.” Id. at 1781 (quotation
and alterations omitted). Moreover, to count as a “contact” giving rise to suit, the defendant’s
actions giving rise to the suit must have been “purposefully directed . . . at residents of the forum”
state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 (1985). The Texas Supreme Court has
10
#5680198
identified “three features” or guideposts for analyzing the relevancy a defendant’s contacts with
the forum in the context of specific personal jurisdiction: “(1) the relevant contacts are those of the
defendant, and the unilateral activity of another person or a third party is not pertinent; (2) the
contacts that establish ‘purposeful availment’ must be purposeful rather than random, fortuitous,
isolated, or attenuated; and (3) the defendant must seek some benefit, advantage, or profit by
‘availing’ itself of the jurisdiction.” Searcy v. Parex Res., Inc., 496 S.W.3d 58, 67 (Tex. 2016).
In addition, “[s]pecific jurisdiction . . . does not exist where the defendant’s contacts with
the forum state are not substantially connected to the alleged operative facts of the case.” Id. at 70.
The Texas Supreme Court has explained that this “substantial connection” test requires
consideration of “[1] what the [plaintiff’s] claim is principally concerned with, [2] whether the
[defendant’s] contacts will be the focus of the trial and consume most if not all of the litigations’
attention, and [3] whether the [defendant’s] contacts are related to the operative facts of the
[plaintiff’s] claim.” TV Azteca v. Ruiz, 490 S.W.3d 29, 52-53 (Tex. 2016) (internal quotations and
citations omitted). For purposes of specific personal jurisdiction, it does not matter how many
contacts a defendant has with the forum state if the plaintiff’s claim does not relate to those
contacts. See Bristol-Myers Squibb, 137 S. Ct. 1781-82.
In this case, Antero’s claims concern the alleged misappropriation by other Defendants of
Antero’s alleged trade secrets concerning oil and gas properties located in West Virginia. Although
Antero alleges that the Original Defendants and New Defendant Austin Fox unlawfully acquired
the alleged trade secrets from non-party Texhoma Land Consultants I Inc. in Tarrant County,
Texas, id. ¶¶ 22, 29, Antero does not allege EnerQuest played any part in that alleged
misappropriation. While EnerQuest did receive (in Oklahoma) certain of the allegedly trade secret
information from Original Defendant Robert Scott Bauer in February 2017, Antero does not (and
11
#5680198
cannot) allege EnerQuest has used or disclosed that information, let alone that it did so in Texas.
Further, even if EnerQuest did disclose or use Antero’s trade secret information (which it did not),
any damages allegedly suffered by Antero from such disclosure or use would be realized in West
Virginia, where the subject oil and gas properties are located, or in Colorado, where Antero alleges
its corporate headquarters are located. See Am. Pet. Interv. ¶ 1.
Simply put, Antero’s claims in this lawsuit have nothing to do with any contact between
EnerQuest and the State of Texas. Therefore, this Court lacks specific personal jurisdiction over
EnerQuest in this case.
IV. Prayer
Wherefore, for the reasons explained above, EnerQuest respectfully requests the Court set
this matter for hearing at the earliest time possible and that, upon hearing, this special appearance
be sustained in all things and the claims and causes of action against Defendant EnerQuest Oil &
Gas, L.L.C. be dismissed for lack of personal jurisdiction. EnerQuest also requests any other or
further relief, at law or in equity, to which it may be justly entitled.
12
#5680198
Respectfully submitted,
BRACEWELL LLP
By: /s/ Joseph M. Cox
Joseph M. Cox
State Bar No. 04950200
Joe.Cox@bracewell.com
Andrea D. Broyles
State Bar No. 24082744
Andrea.Broyles@bracewell.com
1445 Ross Avenue, Suite 3800
Dallas, Texas 75202
Telephone: (214) 468-3800
Facsimile: (800) 404-3970
- and -
Spencer F. Smith
State Bar No. 24008625
MCAFEE & TAFT A Professional Corporation
Tenth Floor, Two Leadership Square
211 N. Robinson Ave.
Oklahoma City, Oklahoma 73102-7103
spencer.smith@mcafeetaft.com
Attorneys for Defendant EnerQuest Oil & Gas,
L.L.C.
Certificate of Conference
This certifies that on April 4, 2018 and April 6, 2018, a telephone conference was held with
Jason Grill, attorney for Intervenor Antero Resources Corporation, regarding the merits of this
motion. A reasonable effort has been made to resolve the dispute without the necessity of court
intervention and the effort failed. Therefore it is presented to the Court for determination.
/s/ Joseph M. Cox
Joseph M. Cox
13
#5680198
Certificate of Service
I hereby certify that on April 18, 2018, a true and correct copy of the foregoing document
was served on the following counsel of record in accordance with the Texas Rules of Civil
Procedure:
Jason R. Grill Phillip B. Dye, Jr.
W. Henry Lawrence Caroline C. Stewart
Steptoe & Johnson PLLC Vinson & Elkins LLP
10001 Woodlock Forest Drive, Suite 300 1001 Fannin Street, Suite 2500
The Woodlands, Texas 77380 Houston, Texas 77002-6760
jason.grill@steptoe-johnson.com pdye@velaw.com
hank.lawrence@stptoe-johnson.com cstewart@velaw.com
Attorneys for Intervenor Antero Resources Attorneys for Intervenor Antero Resources
Corporation Corporation
Gene A. Hamm, II H. Allen Pennington, Jr.
The Hamm Firm Matthew D. Germany
1333 W. McDermott, Suite 200 Pennington Hill, LLP
Allen, Texas 75013 Tindall Square-Warehouse No. 3
ghamm@hammfirm.com 509 Pecan Street, Suite 101
Attorney for Plaintiff Penn Investment Fort Worth, Texas 76102
Funds, LLC, Joe F. Penn Jr., and Venture apennington@phblaw.com
Strong II, LLC Attorneys for Defendant John Bradley
Ashburn and Post Oak Appalachia, LLC
Michael Hassett Avery McDaniel
Jones Hasset, PC Law Office of Avery McDaniel
440 North Center 1205 N. Main Street
Arlington, Texas 76011 Fort Worth, Texas 76164
mhasset@tarrantbusinesslaw.com avery@avrymcdaniel.com
Attorney for Defendants Michael Fisher, Attorney for Braxton Minerals II, LLC
Maegan Fisher, and M&M Consulting
R. Scott Bauer C. Andrew Woodward
8851 Camp Bowie Boulevard W Holman Robertson Eldridge
Suite 200 8226 Douglas Ave., Suite 550
Fort Worth, Texas Dallas, Texas 75225
scott@braxtonenergy.com awoodward@hrepc.com
Attorney for Braxton Acquisitions, LLC, Attorney for Kelly O’Connor
Braxton Energy LLC, and himself
Roland K. Johnson Charles W. Sartain
Harris, Finley & Bogle, P.C. Gray Reed & McGraw
777 Main Street, Suite 1800 1601 Elm Street, Suite 4600
Fort Worth, Texas 76102 Dallas, Texas 75201
rolandjohnson@hfblaw.com Attorneys for Global Oil and Gas Fields
Attorneys for Energy Corporation of
America
/s/ Joseph M. Cox
Joseph M. Cox
14
#5680198
Cause No. 141-290089-17
PENN INVESTMENT FUNDS, LLC, ) In the District Court
Plaintiff, ) of Tarrant County, Texas
)
ANTERO RESOURCES CORPORATION, )
Intervenor, )
)
vs. ) 141 st Judicial District
)
BRAXTON ENERGY, LLC, et al., )
Defendants. )
Verification
STATE OF OKLAHOMA §
§
COUNTY OF OKLAHOMA §
Before me, the undersigned notary public, on this day personally appeared Gregory W.
Olson, who after being duly sworn, stated on his oath that he has read the foregoing Special Ap-
pearance to Object to Personal Jurisdiction and that the statements contained therein are true and
correct based upon either his personal knowledge or information made available to him in in the
course and scope of his employment for EnerQuest Oil & Gas, L.L.C.
Gregory W. so
President Em ritu
EnerQuest Oil & Gas, L.L.C.
Subscribed and sworn to before me by Gregory W. Olson, this /~day of April, 2018.
(Seal)
Notary Public
My Commission Expires: _ _ __._........,_~----
15
EXHIBIT 1
CAUSE NO. 141-290089-17
PENN INVESTMENT FUNDS, LLC, ) IN THE DISTRICT COURT OF
Plaintiff, )
)
ANTERO RESOURCES CORPORATION, )
Intervenor, ) TARRANT COUNTY, TEXAS
)
vs. )
)
BRAXTON ENERGY, LLC, et al., )
Defendants. ) 141 ST JUDICIAL DISTRICT
AFFIDAVIT OF GREGORY W. OLSON
STATE OF OKLAHOMA §
§
COUNTY OF OKLAHOMA §
I, Gregory W. Olson, being duly sworn, depose and state the following upon my oath:
1. "I am over the age of 21. I have never been convicted of a felony. I am of sound
mind, and I am fully competent to make this affidavit. This affidavit is being made in support of
the Special Appearance of EnerQuest Oil & Gas, L.LC. ("EnerQuest") in the above-captioned
case for the sole purpose of objecting to personal jurisdiction over EnerQuest.
2. "I am currently President Emeritus of EnerQuest, am semi-retired, and consult
with EnerQuest on certain matters. From its creation in November of 1996 until December 31,
201 7, I was the President of EnerQuest. At all times relevant to this affidavit, I have resided in
Edmond, Oklahoma and worked out of EnerQuest's Oklahoma City office. Through my
positions as President and President Emeritus, I have personal knowledge of the facts stated
herein, which are true and correct.
3. "EnerQuest is an oil and gas exploration and production company. It is organized
as a limited liability company under the laws of the State of Oklahoma, and it maintains its
headquarters at 12368 Market Drive, Oklahoma City, Oklahoma 73114. EnerQuest does not
maintain any offices or employees in any state other than Oklahoma.
4. "EnerQuest operates oil and gas wells in Oklahoma, Texas, Louisiana, Utah, and
Arkansas. In addition, EnerQuest owns non-operated oil and gas interests in Alabama, Arkansas,
Florida, Georgia, Illinois Louisiana, Michigan, Mississippi, Nebraska, North Dakota, New
Mexico, Oklahoma, Oregon, Pennsylvania, Texas, West Virginia, and Wyoming.
5. "In November 2015, EnerQuest and Braxton Minerals-Appalachia, LLC formed
Braxton Minerals III, LLC, a limited liability company organized under Delaware law. A copy of
the Limited Liability Company Agreement of Braxton Minerals III, LLC (the "BMIII
Agreement") is attached hereto as Exhibit lA. Exhibits B and C and Schedules 4.l(b)(i) and
7.l(b)(i) to the BMIII Agreement have been omitted to protect certain irrelevant and/or
confidential information from unnecessary disclosure. The BMIII Agreement was executed by
myself, as President of EnerQuest, and by Brad Ashburn, as President of Braxton-Minerals-
Appalachia, LLC, dated as of November 10, 2015.
6. "The "Previously Acquired Interests" referenced in Section 4.1 of the BMIII
Agreement were composed of 214.40 net mineral acres located in West Virginia. EnerQuest was
not involved in the initial acquisition of those interests by Braxton Minerals II, LLC, Braxton
Minerals-Appalachia, LLC, or any of their managers, owners, or affiliates.
7. "EnerQuest committed to contribute up to $10,000,000 in capital to Braxton
Minerals III, LLC. The initial capital contribution of $975,860.17 was to fund BMIII's
acquisition of the aforementioned Previously Acquired Interests. Subsequent capital
contributions were to fund the purchase of oil and gas interests acquired after the formation of
BMIII, as described in the BMIII Agreement. Between November 2015 and April 2016,
Page 2of5
EnerQuest fully funded its capital commitment to Braxton Minerals III, LLC. Those funds were
used to purchase certain oil and gas interests in West Virginia and Pennsylvania on behalf of
Braxton Minerals III, LLC.
8. "In March 2016, I received a letter dated March 10, 2016 from Brad Ashburn on
behalf Braxton Minerals-Appalachia, LLC. That letter is attached hereto as Exhibit lB. The letter
notified EnerQuest pursuant to Section 4. 5 of the BMIII Agreement that EnerQuest' s remaining
commitment amount was less than $1,000,000 and requested that EnerQuest elect whether it
would contribute additional capital. By email dated April 8, 2016 to Brad Ashburn, I notified
Braxton Minerals-Appalachia, LLC that EnerQuest had elected not to contribute additional
capital to Braxton Minerals III, LLC, according to the terms of the BMIII Agreement. A copy of
my April 8, 2016 email is attached hereto as Exhibit 1C.
9. "This triggered a "Liquidity Event" under Section 10.1 of the BMIII Agreement.
According to Section 10.2 of the BMIII Agreement, the above Liquidity Event required Braxton
Minerals-Appalachia, as the initial Manager of Braxton Minerals III, LLC, to, among other
things, propose a liquidator for EnerQuest' s approval who would wind up the affairs of Braxton
Minerals III, LLC and distribute its assets as provided in the BMIII Agreement. However,
Braxton Minerals-Appalachia, LLC failed or refused to timely propose a liquidator as provided
in the BMIII Agreement.
10. "On or about August 9, 2017, I, as President of EnerQuest, sent a letter to Braxton
Minerals-Appalachia, LLC, attention to Brad Ashburn and Scott Bauer, demanding that Braxton
Minerals-Appalachia comply with the provisions of the BMIII Agreement by, among other
things, proposing a liquidator as required by Section 10.2 of that Agreement by September 10,
Page 3of5
20I 7. A copy of that letter is attached as Exhibit ID. Braxton Minerals-Appalachia, LLC failed
or refused to comply with EnerQuest' s demand within the specified time.
I 1. "On September 29, 2017, I, as President of EnerQuest, executed a Written
Consent of Members of Braxton Minerals III, LLC that, pursuant to certain provisions of the
BMIII Agreement, removed Braxton Minerals-Appalachia, LLC as Manager of Braxton
Minerals III, LLC and subsequently elected EnerQuest to be the replacement Manager. A copy
of the Written Consent is attached hereto as Exhibit IE. On or about the same date, I sent a letter
to Braxton-Minerals-Appalachia, LLC, attention to Brad Ashburn and Scott Bauer, advising it of
EnerQuest's action. A copy of that letter is attached hereto as Exhibit IF.
12. "In February 20I 8, I learned that Antero Resources Corporation ("Antero")
suspected that Robert Scott Bauer and John Bradley Ashburn had shared certain documents that
Antero alleged were confidential and proprietary business records and trade secrets. In response,
I searched my files and caused EnerQuest to search its files for the documents identified by
Antero. Certain documents matching the description provided by Antero were located, which
documents were then provided to EnerQuest's counsel, Jeremy Black, to provide to Antero's
counsel.
13. "The documents described by EnerQuest were disclosed to me in February 20I 7
or later by Scott Bauer via email and text messages received by me in Oklahoma. Bauer
disclosed the subject documents to me in an effort to solicit EnerQuest to invest in another of
Bauer's mineral acquisition programs. Until February 2018, I did not know that Scott Bauer had
allegedly obtained the subject documents by unlawful means. I did not disclose the subject
information to anyone outside of EnerQuest except for Scott Bauer and Brad Ashburn. To the
Page 4of5
best of my knowledge, no one else with EnerQuest has disclosed the subject information to
anyone outside of EnerQuest except for Scott Bauer and Brad Ashburn."
FURTHER AFFIANT SA YETH NOT.
¢-
Dated this (J day of April, 2018.
Gre ory
President m tus
EnerQuest Oil & Gas, L.L.C.
SUBSCRIBED and SWORN TO before me on this /11tay of April, 2018, by Gregory W.
Olson.
(Seal)
Page 5of5
EXHIBIT 1A
LIMITED LIABILITY COMPANY AGREEMENT
OF
BRAXTON MINERALS III, LLC,
a Delaware Limited Liability Company
November 12, 2015
Bra
Sent: Friday, April 08, 2016 11:37 AM
To: Brad Ashburn
Subject: RE: Election Letter
Attachments: model with matt's eur-1st prod. 4.2016.xlsx; Marcellus EUR vs Lateral Length.pdf; EQ Type
Curve vs EQT.PDF; Peak Rate Per Ft vs Lateral.pdf; 2014 Aries Decline Curves.pdf; 2013
Aries Decline Curves.pdf; 2012 Aries Decline Curves.pdf; Before 2012 Aries Decline
Curves.pdf; Antero Well Map.pdf; Pennsylvannia Marcellus EUR Study - March, 2016.pdf;
Spotfire Plots.pdf; Marcellus Type Curve Analysis.pdf
Brad, we’re going to elect not to move forward with funding. As you know, what really hurt the
economics compared to the way I was looking at the deal before making the investment, is the
deducts Antero started charging. If not for the general deterioration in the gas market, we still
may have been able to model a rate of return that made sense.
You had asked for the results of our analysis. Attached is the model. The model is using a 10.2
bcf eur. Also attached are a number of displays and spreadsheets Matt used in determining his
type curve eur of 10.2 bcf. If you’re interested, we can schedule a call where Matt can walk you
through the analysis and how to interpret some of his displays. Just let me know if you want to
schedule something.
You and your team are a talented group. I sincerely hope we can do business in the future.
There were just some unexpected (Antero deducts) and uncontrollable (gas market
deterioration) events that make it difficult to do anything at this time.
I’ve enjoyed working with and getting to know you. I wish you all the best.
Gregory W. Olson
President
EnerQuest Oil & Gas, LLC
12368 Market Drive
Oklahoma City, OK 73114
(405) 478-3300 ext. 101
From: Brad Ashburn [mailto:brad@braxtonenergy.com]
Sent: Thursday, March 10, 2016 4:20 PM
To: Greg Olson
Subject: Election Letter
Greg:
I trust that Courtland answered all of your questions on Draw 9. Please let me know if you need anything additional.
Attached is the election letter per Section 4.5. –Brad
Best,
Brad Ashburn
Braxton Minerals III, LLC
1
607 Bailey Avenue
Fort Worth, Texas 76107
P: 817-698-0020
C: 817-360-9162
2
EXHIBIT 1D
EnerQuest
0 I L & G A S, L. L. C.
August 9, 2017
VIA FEDEX OVERNIGHT AND EMAIL
Braxton Minerals-Appalachia, LLC
Attn: Brad Ashburn and Scott Bauer
3973 W. Vickery Blvd, Suite 102
Fort Worth, Texas 76107
Email to: brad@postoakroyalty.com
scott@braxtonenergy.com
Re: Certain Matters related to Braxton Minerals
III, LLC, a Delaware limited liability
company ("BMIII")
Dear Brad and Scott:
The purpose of this letter is to demand compliance by Braxton Minerals-Appalachia, LLC,
a Texas limited liability company ("BMA"), in its capacity as Manager of BMIII, with the terms
of that certain Limited Liability Company Agreement of BMIII dated November 12, 2015 (such
agreement, the "BMIII Agreement"). Capitalized terms used in this letter not otherwise defined
in this letter shall have the meanings assigned to them in the BMIII Agreement.
Failure to Liquidate BMIII
Pursuant to the Section 10.1 of the BMIII Agreement, BMIII "shall dissolve and its affairs
shall be wound up upon" a Liquidity Event. As provided in Section 4.5 of the BMIII Agreement,
upon an election by EnerQuest Oil & Gas, L.L.C. ("EnerQuest") to not increase the EnerQuest
Commitment Amount, a Liquidity Event occurs "upon the first to occur of (i) such time as
EnerQuest has funded the EnerQuest Commitment Amount in full, or (ii) a period of sixty (60)
days has expired since the end of the thirty (30) day period" after EnerQuest's receipt of written
notice from BMA that the Remaining EnerQuest Commitment Amount is less than $1,000,000.
As you are aware, on or about March 10, 2016, BMA provided the above described written
notice to EnerQuest. On or about April 8, 2016, EnerQuest responded to BMA' s written notice
indicating that it elects to not increase the EnerQuest Commitment Amount. Based on the
foregoing and pursuant to the terms of the BMIII Agreement, a Liquidity Event occurred on or
12368 Market Drive • Oklahoma City, OK 73114
phone 405.478 .3300 • fax 405.478.3686
about June 10, 2016. Upon the occurrence of the Liquidity Event, pursuant to Section 10.2 of the
BMIII Agreement, BMA, as Manager, has an obligation to propose a liquidator which shall be
approved by EnerQuest. As of the date of this letter, BMA has failed to fulfill its obligation to
propose a liquidator to carry out the liquidation of BMIII. ENERQUEST HEREBY DEMANDS
THAT BMA IN ITS CAPACITY AS MANAGER OF BMIII COMPLY WITH THE
PROVISIONS OF THE BMIII AGREEMENT, INCLUDING, THE PROPOSAL OF A
LIQUIDATOR TO CARRY OUT THE DILIGENT LIQUIDATION OF BMIII.
Obligation to Provide Certain Reports to EnerQuest
Pursuant to Section 7 .1 (b) of the BMIII Agreement, BMA as the Manager of BMIII is
obligated to prepare or caused to be prepared certain reports and provide to EnerQuest including
(i) monthly reports related to the revenues and expenses of BMIII including the calculation of
Distributable Cash Flow and a details related to accounts payable, (ii) annual reports including
financial statements of BMIII and a schedule reflecting the Capital Accounts of the BMIII
Members, (iii) annual schedule of BMIIIs Oil and Gas Properties, and (iv) such other reports as
reasonably requested by EnerQuest. BMA has continuously failed to prepare (or caused to be
prepared) and deliver the above required reports. ENERQUEST HEREBY DEMANDS THAT
BMA IN ITS CAPACITY AS MANAGER OF BMIII COMPLY WITH THE PROVISIONS
OF THE BMIII AGREEMENT AS IT RELATES TO ITS OBLIGATION TO PREPARE
(OR CAUSED TO BE PREPARED) AND PROVIDE TO ENERQUEST CERTAIN
INFORMATIONAL REPORTS RELATED TO BMIII AND ITS ASSETS.
Obligation to Manage BMIII Assets in a Reasonable Manner
BMA, in its capacity as Manager of BMIII, has a duty to manage BMIII' s assets in a
reasonable manner. As you are aware, since about May 2017, Antero as the purchaser of oil and
gas production related to BMIII' s Oil and Gas Interests suspended revenue payments to BMIII as
a result of certain threatened and actual litigation between you. You have failed to diligently work
with Antero to remove BMIII from suspense status. Rather, it has come to my attention that as
recently as in July 2017, Scott has exchanged emails with Antero' s outside counsel stating "I would
agree that Braxton Minerals III, LLC is claim overlapping interests and tied up entirely".
Effectively, instead of diligently working with Antero to cause them to remove BMIII from
suspense and pay the accrued, unpaid revenue, you have perpetuated the continual non-payment
of BMIII's revenue for several months now. ENERQUEST HEREBY DEMANDS THAT
BMA IN ITS CAPACITY AS MANAGER OF BMIII WORK DILIGENTLY WITH
ANTERO TO CAUSE BMIII TO BE REMOVED FROM SUSPENSE AND THE
ACCRUED AND UNPAID REVENUE TO BE PAID TO BMIII.
It is EnerQuest's belief that BMA's actions and/or omissions over the last several months may
constitute "Good Cause" as defined in the BMIII Agreement such that BMA may be removed as
Manager of BMIII. With that said, and without waiving any right to assert the occurrence of
"Good Cause", EnerQuest hereby demands that BMA comply with the demands set forth in this
letter immediately pursue the full satisfaction of these demands without delay. If BMA fails to
fully comply, as determined in EnerQuest's sole discretion, by September 10, 2017, EnerQuest
may elect to deem the existence of Good Cause to remove BMA as Manager of BMIII.
Very truly yours,
ENERQUEST OIL & GAS, L.L.C.,
an Oklahoma limited liability company
~~ faJ!Jk---
Grego:~n
Presidl't~
EXHIBIT 1E
WRITTEN CONSENT OF MEMBERS
OF
BRAXTON MINERALS III, LLC
SEPTEMBER 29, 2017
Pursuant to Section 18-302(d) of the Delaware Limited Liability Company Act and
Section 3. 7 of that certain Limited Liability Company Agreement of Braxton Minerals III, LLC,
a Delaware limited liability company (the "Company"), dated November 12, 2015 (such
agreement, the "Company Agreement"), which each provide that the members may take any
action without a meeting, without prior notice and without a vote if consented to in writing by
members having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all the members entitled to vote thereon were
present and voted, the undersigned, representing the holder of a majority of the issued and
outstanding Membership Interests of the Company, does hereby adopt and consent to the
following resolutions as of the date first stated above (capitalized terms used herein not
otherwise defined herein shall have the meanings assigned to them in the BMIII Agreement):
Removal of Manager
WHEREAS, Section 6.2 of the Company Agreement provides that
"[t]he Manager may be removed, with or without cause, by a
Majority Vote of the Members; provided, however, that so long as
EnerQuest and BMA are the sole Members, BMA may be removed
a Manager only for Good Cause";
WHEREAS, the undersigned is the holder of a majority of the
issued and outstanding Membership Interests of the Company such
that an affirmative vote of the undersigned of its Membership
Interest constitutes a Majority Vote;
WHEREAS, the undersigned deems it advisable and in the best
interest of the Company that BMA be removed as Manager of the
Company; and
WHEREAS, the undersigned has determined that Good Cause
exists for the removal of BMA as Manager of the Company.
NOW, THEREFORE, BE IT RESOLVED, that BMA is hereby
removed as Manager of the Company for Good Cause.
Election of Manager
WHEREAS, Section 6.3 of the Company Agreement provides that
"[i]n the event of the resignation or removal of a Manager, the
Members shall select a replacement Manager through the Majority
Vote of the Members";
Braxton Minerals III LLC - Written Consent of Members - Removal and Ele.
WHEREAS, the undersigned is the holder of a majority of the
issued and outstanding Membership Interests of the Company such
that an affirmative vote of the undersigned of its Membership
Interest constitutes a Majority Vote; and
WHEREAS, the undersigned deems it advisable and in the best
interest of the Company that EnerQuest Oil & Gas, L.L.C., an
Oklahoma limited liability company ("EnerOuest"), be selected as
replacement Manager of the Company.
NOW, THEREFORE, BE IT RESOLVED, that EnerQuest 1s
hereby elected as a Manager of the Company.
General
FURTHER RESOLVED, that this written consent is ordered to be
filed with the minutes of the Members of the Company.
EXECUTED as of the date first written above.
ENERQUEST OIL & GAS, L.L.C.,
an Oklahoma limited liability company
By:
Name: Gregory
Title: President
2
EXHIBIT 1F
EnerQuest
0 I L & G A S, L. L. C.
September 29, 2017
VIA FEDEX OVERNIGHT AND EMAIL
Braxton Minerals-Appalachia, LLC
Attn: Brad Ashburn
607 Bailey Ave.
Fort Worth, Texas 76107
Attn: Scott Bauer
8851 Camp Bowie Blvd. West
Fort Worth, Texas 76116
Email to: brad@postoakroyalty.com
scott@braxtonenergy.com
Re: Notice of Removal of Braxton Minerals-
Appalachia, LLC, a Texas limited liability
company ("BMA") as Manager of Braxton
Minerals III, LLC, a Delaware limited
liability company ("BMIII") and
appointment of successor Manager
Dear Brad and Scott:
Reference is made to that certain letter dated August 9, 2017, from the undersigned on
behalf ofEnerQuest Oil & Gas, L.L.C. ("EnerQuest") to you in your capacity as member-managers
of BMA in its capacity as Manager of BMIII, a copy of which is enclosed herewith (such letter,
the "Prior EQ Letter"). Reference is further made to that certain Limited Liability Company
Agreement of BMIII dated November 12, 2015 (such agreement, the "BMIII Agreement").
Capitalized terms used in this letter not otherwise defined in this letter shall have the meanings
assigned to them in the BMIII Agreement.
As provided in the Prior EQ Letter, EnerQuest, as the majority Member of BMIII and
pursuant to certain rights granted to EnerQuest in the BMIII Agreement, demanded BMA to take
the following actions (collectively, the "EQ Demands"):
12368 Market Drive • Oklahoma City, OK 73114
phone 405.478.3300 • fax 405.478.3686
1. EnerQuest demanded that BMA in its capacity as Manager of BMIII comply with
the provisions of the BMIII Agreement, including as it relates to, the proposal of a
liquidator to carry out the diligent liquidation of BMIII.
2. EnerQuest demanded that BMA in its capacity as Manager of BMIII comply with
the provisions of the BMIII Agreement as it relates to its obligation to prepare (or
caused to be prepared) and provide EnerQuest certain information reports related
to BMIII and its assets as more fully described in the Prior EQ Letter.
3. EnerQuest demanded that BMA in its capacity as Manager of BMIII work
diligently with Antero to cause BMIII to be removed from suspense and the accrued
and unpaid revenue to be paid to BMIII.
In the Prior EQ Letter, EnerQuest demanded compliance with the above demands on or
before September 10, 2017 (the "Compliance Deadline"). As of the Compliance Deadline, you
have failed to provide any response to the Prior EQ Letter or the EQ Demands. Further, although,
subsequent to the Compliance Deadline, you provided certain correspondence in response to the
Prior EQ Letter, you have failed to take any material step towards satisfying the EQ Demands.
Accordingly, and as provided in the Prior EQ Letter, EnerQuest believes that BMA's actions
and/or omissions over the last several months may have constituted "Good Cause" as defined in
the BMIII Agreement such that BMA may be removed as Manager of BMIII.
Further to such belief and based on, among many things, BMA's failure to timely respond
to the EQ Demands, EnerQuest has determined that Good Cause exists and has elected to remove
BMA as Manager of BMIII and appoint itself as replacement Manager of BMIII effective as of
the date of this letter. Enclosed with this letter is a copy of a Written Consent of Members of
BMIII related to such removal and replacement which has been executed by EnerQuest in its
capacity as majority Member (and constituting a Majority Vote) of BMIII.
Very truly yours,
ENERQUEST OIL & GAS, L.L.C.,
an Oklahoma limited liability company
~ ;J, ~
G~n
President
Enclosures
EXHIBIT 2
400 White Oaks Boulevard Writer's Contact Information
Bridgeport, WY 26330 (304) 933-8186
hank.lawrence@steptoe-johnson.com
(304) 933-8000 (304) 933-8183 Fax
www.steptoe-johnson.com
February 23, 2018
Jeremy Black, Esquire
McAfee & Taft
1oth Floor, Two Leadership Square
211 N. Robinson
Oklahoma City, OK 73102
Re: Penn Investment Funds, LLC
v. Braxton Energy, LLC, et al.
Cause No. 141-290089-17
Dear Mr. Black:
Antero Resources Corporation ("Antero") has retained this firm to seek the return
of confidential and proprietary business records and trade secret information. We have recently
learned that Scott Bauer and Brad Ashburn and their affiliated entities, including Braxton
Minerals III, LLC, may have mineral title opinions prepared by Antero's counsel relating to
properties owned by Braxton Minerals III, LLC. We also believe they may have shared Antero's
Critical Date Report and SWN Defects June 2016 Acquisition Report with Braxton Minerals III,
LLC and consequently EnerQuest Oil & Gas, LLC. Antero considers such records as
confidential and proprietary business records and trade secrets. Antero has never consented to
Mr. Bauer, Mr. Ashburn, or EnerQuest Oil & Gas, LLC's possession of such documents or
information. If such information was provided to your client by a third party, that third party had
no authorization to provide them. Antero demands the immediate return of all such information.
Antero obtained the enclosed Temporary Injunction Order dated June 14, 2017,
that restrains persons from divulging and/or communicating any trade secret documents of
Antero. The Order also requires persons to provide notice to Antero of any reasonably
identifiable confidential and proprietary trade secret documents of Antero in their possession and
return same to Antero. The Temporary Injunction Order further requires persons to identify any
individuals or entities to whom the parties have shared Antero's trade secret documents.
Please advise if your client, EnerQuest Oil & Gas, LLC, has such information
and, if so, please return such information to me as counsel for Antero and verify that EnerQuest
Oil & Gas, LLC has not retained copies. Please further advise whether EnerQuest Oil & Gas,
LLC is aware of any third parties to whom such information has been disseminated and the
identity of such third parties. We are aware of the proposed sale by Braxton Minerals III, LLC
of its mineral interests in West Virginia. Antero requests that you verify that EnerQuest Oil &
Gas, LLC and Braxton Minerals III, LLC have not shared such confidential and proprietary
records and trade secrets with any prospective purchasers of such interests. If EnerQuest Oil &
Gas, LLC does not possess such information, please verify this to me. We ask for your response
by 5:00 p.m. EST on Monday, February 26, 2018. Antero will pursue all legal remedies to
. T ETlR AL EX'
West Virginia • Ohio • Kentucky • Pennsylvania • Texas • Colorado • . . .... tr ,,,. lo11•.:,..,,...'".1-
Jeremy Black, Esquire
February 23, 2018
Page2
obtain the return of this information and to insure no further dissemination of such information.
In addition, Antero will seek recovery for any damages arising from the use or disclosure of such
information.
Should you have questions regarding the foregoing, please do not hesitate to
contact me.
Very truly yours,
W. Henry Lawrence
WHL/cee
Enclosure
7943961 .1
CAUSE NO. 141-290089-17
PENN INVESTMENT FUNDS, LLC, § IN THE DISTRIC'i"'
Plaintiff §
§
ANTERO RESOURCES CORPORATION, §
Intervenor §
§
vs. §
§
BRAXTON ENERGY, LLC, § TARRANT COUNTY, TEXAS
BRAXTON ACQUISITIONS, LLC, §
BRAXTON MINERALS II, LLC, §
ROBERT SCOTT BAUER, JOHN §
BRADLEY ASHBURN, MICHAEL §
FISHER, MAEGEN FISHER, M&M §
CONSULTING and KELLY O'CONNOR §
Defendants § 141 st JUDICIAL DISTRICT
TEMPORARY INJUNCTION ORDER AND
ORDER SETTING TRIAL
On the 14th day of June, 2017, the Application for a Temporary Injunction of Intervenor,
ANTERO RESOURCES CORPORATION ("ANTERO"), was heard before this Court. After
considering ANTERO's Application, the pleadings, the evidence presented, and arguments of
counsel, the Court finds that ANTERO'S Application should be GRANTED.
The Court's reasons for ordering the Temporary Injunction are its findings that:
1. ANTERO is engaged in the business of oil and gas exploration and production
from wells located in West Virginia.
2. On or about May 22, 2017, ANTERO learned of Plaintiff's and Defendants'
possession of confidential and proprietary business records and trade secret information by
electronic communication from Texhoma Land Consultants ("TEXHOMA"). Such electronic
communication contained a Demand for Preservation of Evidence dated May 20, 2017, from
Plaintiffs counsel to TEXHOMA. TEXHOMA is the land agent of ANTERO.
Page 1 of I) 7
3. In response to ANTERO'S request that the parties identify any trade secre.t
documents in their possession, Plaintiff's counsel identified portions of ANTERO'S Critical
Date Report dated November 15, 2016, and a portion of ANTERO'S SWN June 2016
Acquisition Defects report. (See text message exchange produced by Plaintiff and bates labeled .
ct. ci ..vi ,+~ c.ci lte..t-+;tt..l '1 a..s. ~ \...,'\\ ?r~
PENN000212 whi ch included two photographs that are ttttttehed to t:bis Order ll'llde~l j_ ~d
~) . In addition, Plaintiff's counsel identified ANTERO'S Title Opinions I '1
Nos. 1522, 1914, and 2894 pertaining to ANTERO'S drilling units in West Virginia. (See
documents produced by Plaintiff and bates labeled PENN000407-000557). ANTERO'S Critical
Date Reports, SWN June 2016 Acquisition Defects report, Title Opinions, and other similar
documents/reports are highly confidential and proprietary information containing trade secrets
(''Trade Secret Documents").
4. ANTERO's Critical Date Reports reflect the status of ANTERO's well activities
in West Virginia including, among other data, the dates of drilling and dates for first gas and oil
sales from the wells. ANTERO's SWN June 2016 Acquisition Defects report reflects due
diligence conducted by ANTERO as part of its proposed acquisition of West Virginia leases
from SWN Energy Services Company, LLC. Such report identifies leases ANTERO proposed to
acquire from SWN Energy Services Company, LLC. Finally, ANTERO's Title Opinions were
prepared by ANTERO's counsel to reflect the ownership of minerals and the rights to develop
such minerals for properties in West Virginia.
5. ANTERO has never consented to possession of such Trade Secret Documents by
the Plaintiff or any of the Defendants. ANTERO made a reasonable effort to keep such
documents secret, and the information is generally unknown to and not readily ascertainable by
third parties. ANTERO maintains these Trade Secret Documents on its computer server. Access
Page 2of., 7
to such documents is limited to ANTERO employees and its land agents through TEXHOMA.
Access is password protected. TEXHOMA's contracts with landmen and others included
confidentiality provisions preventing the personal use and disclosure of ANTERO's confidential
documents and information.
6. ANTERO utilizes said Critical Date Reports, the SWN June 2016 Acquisition
Defects report, and Title Opinions to plan and conduct its exploration and production operations,
as well as its acquisition of mineral interests. ANTERO will be irreparably injured pursuant to
the Texas Uniform Trade Secrets Act because ANTERO's confidential and proprietary trade-
secret documents and information are already in the possession of Plaintiff and Defendants and
will most likely be disseminated to and utilized by third parties to gain an unfair market
advantage in relation to surface and mineral real property interest rights thereby disrupting
ANTERO's business operations and jeopardizing ANTERO's confidential information,
employment relations, existing and prospective business relationships, reputation, and goodwill.
Such damages to ANTERO are not easily calculable and cannot be measured by a certain
standard.
7. The harm to ANTERO is imminent and irreparable. Because the Texas Uniform
Trade Secrets Act has a specific provision for an injunction for its enforcement, no showing of
inadequate remedy at law is required to have injunctive relief granted to enforce the TUTSA.
Regardless of the necessity of proving irreparable harm, the only adequate remedy would be to
immediately enjoin Plaintiff and Defendants from disseminating or using ANTERO's Trade
Secret Documents pending the outcome of ANTERO's claims.
IT IS THEREFORE ORDERED, ADJUDGED and DECREED that Plaintiff, PENN
INVESTMENT FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON
ACQUISITIONS, LLC, BRAXTON MINERALS II, LLC, ROBERT SCOIT BAUER, JOHN
BRADLEY ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING
AND KELLY O'CONNOR, as well as Plaintiffs and Defendants' agents, servants, employees,
successors, assigns, and attorneys are hereby immediately restrained from divulging, revealing,
describing, summarizing, quoting, transmitting, communicating or using outside this Lawsuit or
related lawsuit any and all Trade Secret Documents and/or infonnation of Intervenor, ANTERO
RESOURCES CORPORATION, including but not limited to:
1. Critical Date Reports;
2. The SWN June 2016 Acquisition Defect report; and
3. Real Property Title Opinions prepared by ANTERO's attorneys.
This Court further ORDERS Plaintiff, PENN INVESTMENT FUNDS, LLC, and
Defendants, BRAXTON ENERGY, LLC, BRAXTON ACQUISITIONS, LLC, BRAXTON
MINERALS II, LLC, ROBERT SCOIT BAUER, JOHN BRADLEY ASHBURN, MICHAEL
FISHER, MAEGEN FISHER, M&M CONSULTING AND KELLY O'CONNOR, to produce to
ANTERO within three (3) days of the date of this Order any and all documents previously
exchanged between the parties through the discovery process (unless already done so pursuant to
the June 5, 2017 Temporary Restraining Order) so that ANTERO may review same and
designate any of such documents as "PROTECTED" and thereby subject to the tenns and
conditions of the Agreed Protective Order entered on May 18, 2017 in this Lawsuit. Plaintiff and
Defendants must also comply with the Texas Rules of Civil Procedure and provide ANTERO
with copies for review of any documents produced after the date of this Order. In addition, the
tenns of this Comt's previously issued Order Granting Level III Discovery Control Plan
regarding the discovery of electronic information continue to apply.
Page 4 of I 7
Pursuant to Section 134A.003(c) of the Texas Uniform Trade Secrets Act, IT IS
FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff, PENN INVESTMENT
FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON ACQUISITIONS,
LLC, BRAXTON MINERALS II, LLC, ROBERT SCOTT BAUER, JOHN BRADLEY
ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING AND KELLY
O'CONNOR provide notice to ANTERO and all other parties within five (5) days of the date of
this Order of any additional reasonably identifiable confidential and proprietary trade-secret
documents of ANTERO in the actual or constructive possession of the parties (including their
agents, servants, employees, successors, assigns, and attorneys) and return to ANTERO and their
respective counsel any such reasonably identifiable confidential and proprietary trade-secret
documents (unless already done so pursuant to the June 5, 2017 Temporary Restraining Order).
The parties' obligation to comply with this paragraph remains in effect during the pendency of
this temporary restraining order and any future temporary injunction/permanent injunction.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff, PENN
INVESTMENT FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON
ACQUISITIONS, LLC, BRAXTON MINERALS II, LLC, ROBERT SCOTT BAUER, JOHN
BRADLEY ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING
AND KELLY O'CONNOR provide ANTERO and all other parties within five (5) days of the
date of this Order a list detailing any persons or entities to whom the parties shared ANTERO'S
Trade Secret Documents or any additional reasonably identifiable confidential and proprietary
trade-secret documents of ANTERO (unless already done so pursuant to the June 5, 2017
Temporary Restraining Order).
Page S of I' 7
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff, PENN
INVESTMENT FUNDS, LLC, and Defendants, BRAXTON ENERGY, LLC, BRAXTON
ACQUISITIONS, LLC, BRAXTON MINERALS II, LLC, ROBERT SCOTT BAUER, JOHN
BRADLEY ASHBURN, MICHAEL FISHER, MAEGEN FISHER, M&M CONSULTING
AND KELLY O'CONNOR maintain, preserve and not destroy, modify, alter, or misplace any
and all computers, phones, tablets, servers, flash drives, memory cards, online cloud storage
locations, and email systems that contain ANTERO'S Trade Secret Documents or any additional
reasonably identifiable confidential and proprietary trade-secret documents of ANTERO until
such can be secured through subpoena or deposition. These items must be preserved in their
exact condition, without destruction or alteration of any kind in relation to Antero's Trade Secret
Documents, intentional or unintentional. To the extent these devices must necessarily remain in
use, the Plaintiff and Defendants must ensure that no destructive routines are allowed to run on
these devices. Such destructive routines preclude the use of any programs, applications,
routines, whether manually or automatically initiated, that have the ability to alter or destroy data
of any kind. Examples, which are merely examples and not exhaustive, include defragmentation,
cleaning programs of any kind, repair programs of any kind, and programs designed to destroy
data of any kind. Plaintiffs and Defendants are required to actively prevent the alteration or
destruction of any Trade Secret Document data on these devices, including data that they may
not consider relative to this matter, because alteration or destruction of any kind can hamper the
forensic recovery of data and other important and germane data artifacts.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that ANTERO's and
DEFENDANT KELLY O'CONNOR'S respective counsels of record will execute and agree to
Page 6 of Si 7
be bound by the terms of the Agreed Protective Order entered on May 18, 2017 in this Lawsuit
or any subsequent amended Agreed Protective Order.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that trial of the merits in
this cause is set for April 2, 2018.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that this temporary
injunction order shall not be effective unless and until ANTERO has filed an appropriate bond or
cash deposit via personal ch~ck in lieu thereof in the amount of $ ,,//d!J' ~
7~<=~ !DING JUDGE '
Page 7of 9 7
EXHIBIT 3
From: Black, Jeremy
Sent: Monday, March 05, 2018 2:59 PM
To: 'Hank Lawrence'
Cc: 'Jason Grill'
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)
Attachments: Emails.zip; Text.zip; Attachments.html
Hank,
In response to Antero’s letter dated 2/23/18, EnerQuest has reviewed the materials in its possession or control including
(1) various correspondence (email and texts messages) and (2) paper files EnerQuest received upon taking over the
management of BMIII from Braxton Minerals-Appalachia, LLC (“BMA”). The focus of EnerQuest’s review was to
determine whether any of Antero’s confidential and proprietary business records and trade secret information was
shared with EnerQuest. Included with this email are the following materials:
1. A zip file containing six (6) emails involving Scott Bauer which reference and/or include a Critical Date Report
and/or drilling schedule.
2. A zip file containing a text message exchange between Scott Bauer and Greg Olson w/ EnerQuest that includes a
screen shot of a drill schedule.
3. A ShareFile link whereby certain additional information that was sent by Scott Bauer to Greg Olson w/
EnerQuest via Dropbox. These are being shared via ShareFile due to the size of the files.
It is EnerQuest’s belief that all of the information included in this email was received by EnerQuest in February 2017 (or
later) and this information was shared by Scott Bauer in conjunction with Scott Bauer’s attempt to have EnerQuest
commit additional funds to his mineral acquisition program. As background, BMIII is the only mineral acquisition venture
sponsored by Scott Bauer or Brad Ashburn (or any of their affiliated entities) in which EnerQuest has participated. BMIII
acquired all of its minerals between November 2015 and April 2016, almost a year before any of the materials
referenced in this email were provided by Scott Bauer to EnerQuest. EnerQuest has not shared this information with any
party other than Scott Bauer and Brad Ashburn.
Please let me know if you have any questions about or otherwise would like to discuss anything included in this
response.
Regards,
Jeremy
ShareFile Attachments
Title Size
EQ Response to Antero Letter Dated 2-23-18 589.8 MB
Download Attachments Jeremy Black uses ShareFile to share documents securely. Learn More.
From: Hank Lawrence [mailto:Hank.Lawrence@Steptoe-Johnson.com]
Sent: Monday, February 26, 2018 6:48 PM
To: Black, Jeremy
Cc: Jason Grill
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)
1
Jeremy,
Antero Resources Corporation (“Antero”) agrees to EnerQuest Oil & Gas, LLC’s (“EnerQuest”) request for a one week
extension, i.e., until March 5, 2018 at 5:00 p.m. EST, to: (1) advise Antero if EnerQuest possesses any Antero confidential
and proprietary business records and trade secret information; (2) identify any individuals or entities to whom
EnerQuest shared any Antero confidential and proprietary business records and trade secret information; and (3) return
any Antero confidential and proprietary business records and trade secret information.
Please also be advised that it is our understanding that the “Notice to Potential Bidders” posted on Energynet.com
related to the proposed sale by Braxton Minerals III, LLC (“BMIII”) of its mineral interests in West Virginia states that
Antero has not advised BMIII “why the revenue is in suspense.…” As previously communicated, Antero initially placed
the relevant royalty payments in suspense due to the ongoing ownership dispute between the members of BMIII. As you
know, Robert Scott Bauer objected to EnerQuest’s replacement as manager of BMIII, and it is therefore unclear to
Antero if BMIII possesses the proper authority to post said minerals for sale. Antero’s uncertainty in this regard will
necessarily carry forward to effect any buyers from BMIII. More recently, Antero discovered information that raises
concerns as to whether BMIII may have acquired said mineral interests in West Virginia through the use of improperly
misappropriated confidential and proprietary business records in violation of the Texas Uniform Trade Secrets Act
(“TUTSA”).
Based on the foregoing, Antero reserves the right to not recognize any mineral deed ownership transfers in the event of
a sale of any of BMIII’s mineral interests in West Virginia. In other words, Antero provides no assurance that the royalty
payments will be released to any new owners of said minerals until the above issues are resolved, and Antero can be
assured that it is paying the true owner. As you can appreciate, Antero does not want to be exposed to paying these
royalties more than once. Antero therefore recommends that BMIII cancel any sale of its mineral interests in West
Virginia. In the alternative, BMIII should advise any potential buyers of the disputed issues pertaining to the mineral
properties.
I look forward to hearing from you.
Hank Lawrence
Steptoe & Johnson PLLC
304-933-8186
From: Black, Jeremy [mailto:jeremy.black@mcafeetaft.com]
Sent: Monday, February 26, 2018 1:50 PM
To: Hank Lawrence
Cc: Jason Grill
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)
Hank,
I have discussed your letter with EnerQuest Oil & Gas, LLC (“EnerQuest”) and they have confirmed that none of Antero’s
confidential and proprietary materials described in your letter have been shared with any prospective purchaser of the
mineral interests held by Braxton Minerals III, LLC (“BMIII”). As for your request to verify whether EnerQuest possesses
such information, we request a one week extension of the response date to 5pm EST on Monday, March 5, 2018. The
additional time is necessary to allow EnerQuest to review the various materials received from Scott Bauer and/or Brad
Ashburn related to BMIII in order to determine whether any of the referenced Antero materials are included therein.
Please confirm whether you are agreeable to the extension.
2
Also, thank you for requesting BMIII’s suspense information from Antero and we look forward to receiving this
information from you.
Regards,
Jeremy
From: Hank Lawrence [mailto:Hank.Lawrence@Steptoe-Johnson.com]
Sent: Friday, February 23, 2018 4:24 PM
To: Black, Jeremy
Cc: Jason Grill
Subject: FW: Braxton - letter to Jeremy Black (2/23/18)
Jeremy,
Please see attached correspondence outlining our conversation earlier today regarding Antero’s title opinions. I have
requested that Antero send me the current suspense balance for Braxton Minerals III, LLC and will forward that to you. I
will later send you the updated information through the end of February 2018 as you requested.
Hank Lawrence
Steptoe & Johnson PLLC
304-933-8186
Steptoe & Johnson PLLC Note:
This e-mail and any attachments are confidential and may be protected by legal privilege. If you are not the intended recipient, be aware that any disclosure,
copying, distribution or use of this e-mail or any attachment is prohibited. If you have received this e-mail in error, please notify us immediately by returning it to the
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3
EXHIBIT B
141-290089-17 FILED
TARRANT COUNTY
5/2/2018 5:32 PM
CAUSE NO.
CAUSE 141-290089-17
NO. 141-290089-17 THOMAS A. WILDER
DISTRICT CLERK
PENN INVESTMENT
PENN INVESTMENT FUNDS,
FUNDS, LLC,
LLC, §§ THE DISTRICT
IN THE
IN COURT OF
DISTRICT COURT OF
Plaintiff
Plaintiff §§
§§
ANTERO RESOURCES
RESOURCES CORPORATION,
‘
ANTERO CORPORATION, §§
Inlervenar
Intervenor §§
§§
VS.
VS. §§
§§
BRAXTON ENERGY,
BRAXTON ENERGY, LLC,LLC, §§
BRAXTON ACQUISITIONS,
BRAXTON ACQUISITIONS, LLC, LLC, §§
BRAXTON MINERALS
BRAXTON MINERALS II, LLC,
II, LLC, §§
ROBERT SCOTT
ROBERT SCOTT BAUER,
BAUER, JOHN JOHN §§
BRADLEY ASHBURN,
BRADLEY MICHAEL
ASHBURN, MICHAEL §§
MAEGEN FISHER
FISHER, MAEGEN
FISHER, FISHER ANDAND §§
M&M CONSULTING,
M&M CONSULTING, §§
§§
Original Defendants §§ 141st JUDICIAL DISTRICT
14 1 st JUDICIAL DISTRICT
§§
§§
AUSTIN FOX,
AUSTIN FOX, JOE PENN JR.,
JOE F. PENN JR, §§
BRAXTON MINERALS
BRAXTON VENTURE §§
MINERALS III, VENTURE
STRONG II LLC,
STRONG LLC, POST OAK
POST OAK §§
APPALACHIA LLC,
APPALACHIA TURN 2 ENERGY
LLC, TURN ENERGY §§
LLC, BRAXTON-MINERALS
LLC, BRAXTON-MINERALS §§
APPALACHIA LLC,
APPALACHIA AND ENERGY
LLC, AND ENERGY §§
CORPORATION OF
CORPORATION OF AMERICA,
AMERICA, §§
ENERQUEST OIL
ENERQUEST OIL && GAS,
GAS, L.L.C., §§
§§
New
New Defendants.
Defendants. §§ TARRANT COUNTY,
TARRANT TEXAS
COUNTY, TEXAS
INTERVENOR AN TERO RESOURCES
INTERVENOR ANTERO RESOURCES CORPORATION’S
CORPORATION’S RESPONSE
RESPONSE
TO ENERQUEST
TO ENERQUEST OIL & GAS
OIL & GAS L.L.C.’S SPECIAL APPEARANCE
SPECIAL APPEARANCE
AND MOTION
AND MOTION TOTO CONTINUE
CONTINUE
Intervenor Antero Resources Corporation (“Antero”) files
files this
this Response to EnerQuest Oil
& Gas, L.L.C.’s (“EnerQuest”) Special Appearance to
& to Object to Personal Jurisdiction.
EnerQuest’s special appearance should
Should be denied. company registered to
denied. EnerQuest, a company to do
business in Texas, entered into a joint venture with a Texas entity.
entity. That venture, to be based in
Fort Worth, was manned by
was manned two Texans tasked with collecting information about oil and gas
by two
EnerQuest.
properties and conveying that information to EnerQuest. As agreed, EnerQuest received
As
from Texas and
information from money to Texas to invest in those properties.
and then sent money We now
properties. We now know
know
two Texans EnerQuest designated for this work, Scott Bauer and Brad
that the two Ashbum, acquired
Brad Ashburn,
Antero’s trade secrets in the course of and in furtherance of
of that work. EnerQuest even admits that
documents from
it ultimately received Antero’s trade-secret documents had
from Bauer. Therefore, EnerQuest had
sufficient contacts with Texas for this Court to exercise personal jurisdiction in connection with
sufficient
this matter.
To assure that the Court would
To would be of the timing, quantity, and scope of
be fully informed of
EnerQuest’s relevant contacts,
contacts, Antero served limited discovery requests on EnerQuest before this
special appearance was set
set for hearing.
hearing. EnerQuest’s responses are not yet due. Therefore, to the
extent the Court requires additional information on EnerQuest’s relationship to
to Texas and the
moves for a continuance of the special appearance hearing so that it
matter at hand, Antero moves may
it may
of personal jurisdiction.
conduct discovery limited to the issue of jurisdiction.
I. FACTUAL BACKGROUND
FACTUAL BACKGROUND
owning
EnerQuest is registered to do business in Texas, operating oil and gas wells and owning
here,‘1 but EnerQuest’s connection with this
non-operating oil and gas interests here, this specific case begins
with the formation of a Texas-based company. In November of 2015, EnerQuest and Braxton
November of
LLC (“BMA”), an existing Texas company, entered into a Limited Liability
Minerals-Appalachia, LLC
Company Agreement
Company Agreement to form
fonn Braxton Minerals III, LLC (“the BMIII Agreement”).
III, LLC Agreement”)?2 EnerQuest
1
1
EnerQuest’s Special Appearance at
at 4.
4.
2
W. Olson (attached as Exhibit 11 to EnerQuest’s Special Appearance, henceforth, “Olson
Affidavit of Gregory W.
Affid.”) ¶ 5;
Affidf’) 1] 5; BMIII Agreement l-A to Special Appearance) §§ 2.1.
(attached as Exhibit 1-A
2
Ashbum and Scott Bauer,
concedes that BMIII was “sponsored by” Brad Ashburn whom are Texas
of whom
Bauer,33 both of
The BMIII
and defendants in this case. The
residents and BMIII Agreement, which was executed by
which was Brad
by Brad
Ashbum as president of
Ashburn of the Texas-based BMA,44 designated the new company’s principal place of
Texas—based BMA, of
Texas.55
business as Fort Worth, Texas.
As part of
As Texan
of its initial investment in BMIII, EnerQuest obtained information from its Texan
may have included the Antero trade secret information in question. Under
colleagues that may Under the
BMIII new company
BMIII Agreement, the new BMIII was
company BMIII was to acquire mineral interests from another Braxton
entity, defendant Braxton Minerals II, LLC.56
11, LLC. The BMIII Agreement
The BMIII Agreement recites that, prior to
BMA provided EnerQuest with “title
execution, BMA “title reports” concerning the title of the grantors from
whom Ashbum and
shown that Ashburn
acreage.77 It has already been shown
whom Braxton Minerals II acquired its acreage.
Bauer, the men running Braxton Minerals II,
11, possessed Antero’s
Anter0’s confidential
confidential title
title opinions and
trade—secret documents
other trade-secret summer and fall of
documents dated in the summer Ashburn
of 2015 because Bauer and Ashburn
produced such trade secret documents to Antero in discovery.
discovery.88 Based Ashbum
Based on the information Ashburn
BMA, EnerQuest sent more than $975,000 to Texas to
and Bauer provided through BMA, BMIH’s
to fund BMIII’s
BMA and Braxton Minerals II (both Texas entities)
West Virginia acreage that BMA
acquisition of the West
acquired.99
had previously acquired.
3
Hank Lawrence
from Jeremy Black, EnerQuest, to Hank
See Exhibit 1 (Email from
1 & Johnson
Lawrence and Jason Grill, Steptoe &
PLLC (March 5, 2018), enclosed with Letter from
PLLC from Joseph M.M. Cox, Bracewell, to Jason Grill
Grill (April 26, 2018)
(henceforth, “Cox Letter”)).
Letter”)).
4
Affid, ll
Olson Affid. ¶ 5.
5
BMHI Agreement
BMIII Agreement §§ 1.4(b).
l.4(b),
6
BMIII Agreement
BMIII Agreement §§ 4.1(a).
4.l(a).
7
BMIII Agreement
BMIII Agreement §§ 4.1(a).
4.l(a).
8
was added to this case, other parties had produced 2014 and 2015 Title Opinions subject to
Before EnerQuest was
the Court’s Temporary Injunction. confidential nature, but Antero will
Injunction. These documents are not attached due to their confidential
on this Special Appearance.
make them available for the Court’s review during the hearing on Appearance.
9
Affid, ll
Olson Affid. ¶ 6.
3
Moreover, EnerQuest’s involvement with Texas through BMIII was expected to
to be long-
Under the seven-year agreement,
lasting. Under agreement,‘°
10
committed to invest ten million dollars in
EnerQuest committed
work,“
BMIII’s property acquisition work, 11
which Worth office by
would be carried out from the Fort Worth
which would by
Ashbum and Bauer.
Ashburn Bauer.”12
The BMIII Agreement
The BMIII Agreement required Ashburn
Ashburn to devote all of BMHI,
of his time to BMIII,
and required Bauer
and Bauer to devote at least fifty
fifty percent of mandated that all their
and mandated
of his time to BMIII, and
West Virginia leasing activity would
West would be performed exclusively for Fort Worth-based BMIII.”
W0rth—based BMIII. 13
would not dispose of its interest in Texas-based
Moreover, EnerQuest agreed it would BMIII without the
Texas—based BMIII
of its Texas-based
approval of BMA.”14
Texas—based co-venturer, BMA.
BMIII would
Texas—based BMIII
EnerQuest agreed that Texas-based would seek out oil and gas information for
EnerQuest’s benefit; demanded was
benefit; and the information EnerQuest demanded was likely tainted by BMA’s
by BMA’s
of Antero trade secret documents. For each property acquisition after the
improper possession of
company’s creation,
creation, the Texas-based BMA, acting as Manager
Texas—based BMA, Manager of was required to send
of BMIII, was
BMIII planned to acquire, including property and
EnerQuest certain information about acreage BMIII
BMA was
grantor details.155 Critically, BMA
I
which horizontal drilling
was to propose acquisitions in units for which
16
permits already issued.16 identification and drilling units could have
Details regarding the property identification
been taken from the title opinions and other Antero trade secret information in Bauer and
Ashburn’s BMA was toto turn this
Ashbum’s possession. Under the BMIII Agreement, BMA this information over to
to
1°
10
BMIll Agreement
BMIII Agreement §§ 2.1.
11
1‘
BMIH Agreement
See BMIII A-Members and Commitments.
Agreement Exhibit A-Members Commitments.
12
12
BMIH Agreement
See BMIII Agreement §§ 6.4(a).
13
13
BMIll Agreement
BMIII Agreement §§ 11.1(b).
ll.l(b).
14
14
BMIH Agreement
See BMIII Agreement §§ 9.1(b).
9.l(b).
15
15
BMIll Agreement
BMIII Agreement §§ 4.1(b)(i).
4.l(b)(i).
‘“
16
See id.
id.
4
who would
EnerQuest, who would decide whether or not to approve the acquisitions based on
on the information
provided.”
provided.17
Based on the information Antero has now, Bauer
Based Ashbum did as EnerQuest asked,
Bauer and Ashburn
West Virginia acreage they were
presumably sending EnerQuest information about the West were targeting
and to which Antero’s trade secret documents relate. BMIII acquired the majority of
relate. BMIII West
of its West
November 2015 through April 2016,
Virginia minerals between November 2016,18
18
which Bauer
a time frame for which
Ashbum possessed a significant
and Ashburn significant amount of
of Antero’s trade secret information.
information.”19
would have
It would
been consistent with Bauer’s practice,
practice, in the course of
of sending information from Texas to
to solicit
solicit
EnerQuest’s funding, to
to use the improperly-obtained
improper1y—obtained confidential BMA’s
of Antero in BMA’s
confidential information of
possession. For example, Bauer admits to
to soliciting
soliciting Joe Penn’s investment using Antero trade
and the promise of
secrets and of access to such secrets.
secrets.”20
EnerQuest admits that it trade—secret—based offer from Bauer,
it received at least one such trade-secret-based
show that in the course of that discussion, EnerQuest specifically
and the documents show specifically sought out
Antero’s confidential
confidential information. EnerQuest concedes that in or after February 2017, Bauer sent
EnerQuest some of Antero’s trade secret documents that Bauer had maintained in
in Texas: two
drilling
drilling schedules with detailed information on Antero’s drilling
drilling program, a permit list
list showing
hoped would
Antero’s active permits, and other information Bauer hoped prompt EnerQuest to invest in
would prompt
17
17
See id.
id.
1*
18
Affid. 1l
Olson Affid. Cox Letter.
¶ 7; Cox
19
19
See Antero’s Title
Title Opinions;
Opinions; Drill of6.l5.20l5-Patterson
Drill Schedule as of of6.l5.20l5-Rig
6.15.2015-Patterson 340; Drill Schedule as of 6.15.2015-Rig
10;
10; Exhibit WV
5 WV Permits as of 6.5.2015; Antero’s Critical
of6.5.20l5; Critical Date Report (to
(to be made available for
for the Court’s review
at the hearing on this Special Appearance).
2"
20
See Exhibit 2 (Transcript of Temporary Injunction hearing at 36:25-37:3 Penn of
3625-3713 (explaining that he told Joe Penn
Antero’s trade secret documents because: “He“He was money in the deal. II was
was looking to invest other money was making money
him money
making him
on deals,
deals, and then II wanted to
to keep it
it rolling, my bounds.”)).
rolling, and so II overstepped my
5
more mineral acquisitions.
more acquisitions.“21
from June of 2015 to 2016, contained
These documents, dated from
detailed information on Antero’s permits and drilling
drilling schedules that
that could only have been derived
from Antero’s confidential
confidential business information, and in
in some cases, on the
cases, had Antero’s logo on
What EnerQuest does not mention in its papers is
documents. What
documents. is that
that EnerQuest’s then-president
Greg Olson actually reached out to Bauer
Greg and requested Antero’s drilling
Bauer in Texas and drilling schedule
Bauer.”
information from Bauer. 22
Discovery could turn up
up additional trade-secret by
trade—secret information sent by
Ashbum to EnerQuest in earlier time periods, as EnerQuest has not specifically
Bauer and Ashburn specifically denied
documents or information pulled from
receiving any other trade-secret documents from trade-secret documents.
Worth—based BMIII. After
In September 2017, EnerQuest sought to take control of Fort Worth-based
repeated correspondence directed to Texas citizens and entities
entities (attached to
to EnerQuest’s Special
Appearance 1-D, 1-E,
1-C, 1-D,
Appearance as Exhibits 1-C, 1-E, and 1-F),
1-F), EnerQuest asserted its apparent role of manager
of manager
of BMIII.
II. LEGAL STANDARD
LEGAL STANDARD
Courts have personal jurisdiction over a nonresident defendant when the state’s
state’s long-arm
statute permits such jurisdiction and the exercise of jurisdiction is consistent with federal and state
due-process guarantees. Moncrief Oil Int’l
Moncrief0il Int’! Inc.
Inc. v. OAO Gazprom, 414
v. OAO 414 S.W.3d
S.W.3d 142, 149 (Tex.
142, 149
As for the Texas long-arm statute, it broadly allows courts to exercise personal jurisdiction
2013). As
who contracts with Texas residents with the intent that either party perform in
over a nonresident who
2‘
21
Affid. 11
Olson Affid. ¶ 13; Cox Letter. The
13; Cox The documents EnerQuest obtained and produced to Antero include: Drill
340 (a document
6.l5.2015~Patterson 340
Schedule as of 6.15.2015-Patterson document EnerQuest obtained from Bauer listing detailed information
West Virginia); Drill Schedule as of 6.15.2015-Rig 10
about property interests in West may have
document EnerQuest may
10 (a document
obtained from Bauer on August 6, 2016, per the marking on the document, listing detailed information about property
West Virginia);
interests in West WV 6.52015 (a document
Virginia); WV Permits as of 6.5.2015 document EnerQuest obtained from Bauer listing detailed
permitting information about properties in WestWest Virginia); Antero’s Critical
Critical Date Report (a
(a document EnerQuest
obtained from Bauer containing Antero’s
Antero's logo and clearly
clearly indicating it
it belonged to
to Antero). These materials will be
available for
for the Court’s review at
at the hearing.
22
See Exhibit 3 (February 16, 2017 Email from
16, 2017 from Greg BMA, specifically
Greg Olson, EnerQuest, to Scott Bauer, BMA, specifically
how the wells were
requesting the drill schedule to see how were scheduled).
scheduled).
6
who “commits a tort
Texas, and over a nonresident who whole or in part in this state.” T
tort in whole TEX. CIV.
EX. C IV.
PRAC.
P & RREM.
RAC. & CODE
EM. C ODE §
§ 17.042(2). As for due process concerns, because the Texas statute reaches
l7.042(2). As
far as the federal constitutional requirements for due process will allow,” Spir Star AG
“as far AG v.
v.
S.W.3d 868, 872 (Tex. 2010), a state court can exercise
Kimich, 310 S.W.3d exercisejurisdiction
jurisdiction over a nonresident
defendant if
if (1)
(1) the defendant has established “minimum contacts” with the state
state and (2)
(2) the
exercise of jurisdiction comports with “traditional notions of
of jurisdiction of fair
fair play and substantial justice.”
justice.” Int
Int’l’l
Shoe Co.
Shoe Co. v.
v. Washington, 316 (1945).
Washington, 326 U.S. 310, 316
AA nonresident’s contacts can give rise
rise to
to general or specific
specific personal jurisdiction.
jurisdiction.
Continuous and systematic contacts create general jurisdiction, while specific jurisdiction exists
when of action arises from or is related to the defendant’s purposeful activities
when the cause of activities with the
state. Retamco Operating, Inc.
Retamco Operating, V. Republic Drilling Co.,
Inc. v. S.W.3d 333, 338
C0,, 278 S.W.3d 338 (Tex. 2009).
III. ARGUMENT
ARGUMENT
A. EnerQuest is Subject to Personal Jurisdiction Because
EnerQuest Committed a Tort in
Because it Committed
Texas.
The evidence demonstrates that EnerQuest committed a tort in Texas, making
The making it
it subject to
specific jurisdiction here. Using, disclosing, or merely acquiring trade secrets constitutes the tort
specific
of misappropriation as defined by Uniform Trade Secrets Act
by the Texas Uniform Act (“TUTSA”). See T
TEX.
EX.
CIV.
C PRAC.
IV. P & RREM.
RAC. & CODE
EM. C ODE § 134A; Seismic Wells,
§ 134A; LLC v.
Wells, LLC v. Matthews, 2016 WL 3390507, at *3
2016 WL *3 (N.D.
Tex. Feb. 22,
22, 2016) (“The tort
tort of
of misappropriation is defined by
is defined by TUTSA.”). There is no doubt
Ashbum, BMIII
that EnerQuest requested information about oil and gas properties from Bauer, Ashburn, BMIII
BMA—all Texas residents or entities—in furtherance of EnerQuest’s business relationship
and/or BMA—all
with these Texas entities, and as a result, EnerQuest acquired Antero’s trade secrets.
secrets. Therefore,
Antero has claims for misappropriation and conspiracy that arise
arise directly
directly out of
of EnerQuest’s
it had documents containing Antero’s trade secrets
conduct directed at Texas. EnerQuest admits it secrets
7
making it amenable to Texas jurisdiction
in 2017, making jurisdiction in connection with the misappropriation and
case.”
conspiracy claims in this case. 23
Exactly which
which documents had and
documents EnerQuest had and when, and
and the
may be liable in damages
which EnerQuest may
extent to which damages in addition to injunctive relief, is a matter for
But tracing specific
ultimate merits determination. But specific documents and timing is in no way relevant to
no way
the jurisdiction question to be decided today.
was hardly the result of
EnerQuest’s connection to these Texas events was random or fortuitous
of random
profit, reached outside of
actions of other defendants. EnerQuest, seeking profit, Oklahoma to create a
of Oklahoma
two Texas residents in an agreement specifically
seven-year relationship with a Texas business and two specifically
designating they would work in Fort Worth. See Moncrief, 414
would do their work 414 S.W.3d
S.W.3d at 151
151 (requiring,
specific personal jurisdiction,
for specific jurisdiction, that
that the defendant “reach out beyond one state and create
continuing relationships and some benefit,
and obligations” and “seek some profit by
benefit, advantage or profit by availing
itself
itself of the jurisdiction”).
jurisdiction”). EnerQuest specifically requested information regarding permits and
West Virginia,
acreage in West Virginia,“24
and then accepted Antero’s trade secrets
secrets documents that had been
procured and maintained in
in Texas by
by EnerQuest’s Texas business partners,” who conceivably
partners,25 who
Based on
acquired the information using EnerQuest’s funding. Based on the extraordinary level of
of detail in
someone
would have no reason to disclose this data to someone
these documents and the fact that Antero would
knew or should have known
pursuing a competing interest in the minerals in question, EnerQuest knew known
was confidential
that this information was confidential and proprietary information of Antero. Nevertheless,
EnerQuest kept the trade secret documents in its possession without notifying Antero until Antero
them.“
expressly requested them. 26
23
Cox Letter.
See Cox
24
24
BMI Agreement
BMI Agreement §§ 4.1; see Exhibit 3, Olson-Bauer Emails (specifically
(specifically requesting the drilling schedule).
schedule).
25
Cox Letter (acknowledging
(acknowledging receipt of
of Antero’s trade secret documents).
documents).
2“
26
Cox Letter (explaining that Bauer
Cox Bauer sent EnerQuest the information in February of
of 2017).
8
The Supreme
The Supreme Court of
of Texas has found that the receipt of
of trade secrets,
secrets. even if
if the recipient
did not request them, was of personal jurisdiction.
was a contact weighing in favor of jurisdiction. See id. (finding
id. (finding
jurisdiction proper when the defendants “accepted Moncrief’s
personal jurisdiction Moncrief’ s alleged trade secrets”).
find out whether EnerQuest ever came
The Court need not await discovery to find
The came to Texas to obtain
these secrets or meet with their partners, as EnerQuest’s “[p]hysical presence in
their partners, in the state
state is
is not
required” to
to exercise jurisdiction.
jurisdiction. Moncrief, 414 SW3d at 152.
414 S.W.3d 152. EnerQuest’s actions contributing
to
to the misappropriation of
of Antero’s trade secrets
secrets in Texas, and EnerQuest’s admitted possession
documents from
of trade secret documents from Texas, are sufficient
sufficient for personal jurisdiction
jurisdiction to attach.
B. EnerQuest is Subject to Personal Jurisdiction Because
EnerQuest Formed a Contract
Because it Formed
Performed in Texas.
Texas Entities to be Performed
with Texas
EnerQuest sought and received the benefit
benefit of Texas laws, purposefully forming a contract
with Texas entities with the intent that the contract be performed in Texas and engaging in
numerous communications with Texas residents, all of which
numerous of
which ultimately led to the disclosure of
Antero’s trade secrets. some or all of
secrets. These contacts gave rise to some of the claims at issue and subject
TEX.
EnerQuest to specific personal jurisdiction in Texas. See T CIV.
EX. C PRAC.
IV. P & RREM.
RAC. & CODE
EM. C ODE § 17.042.
§ 17.042.
By who would
By entering into the contract with Texas entities who would perform the contract in Texas,
itself of Texas’ laws and protections. See Max
EnerQuest purposefully availed itself Max Protetch,
Protetch, Inc.
Inc. v.
v.
340 S.W.3d
Herrin, 340 S.W.3d 878, 887 (Tex. App. 2011) (finding that a defendant purposefully availed itself
201 l) (finding itself
of Texas laws through forming a contract to be performed in Texas). The BMIII Agreement
The BMIII Agreement
Ashbum, Texas residents, would
contemplated that Bauer and Ashburn, would largely perform the contract in
Texas, giving EnerQuest reason to anticipate being haled into court there. See Nagle & Black
Nogle &
Aviation, Inc,
Aviation, Inc., 290 S.W.3d 277, 283 (Tex. App.
290 S.W.3d App. 2009) (finding
(finding personal jurisdiction, even though
the defendant did “not locat[e] offices in Texas and [did] not target[] the Texas
locat[e] any employees or offices
market,” because “it specifically work of
specifically chose to use the work of this Texas resident”). Moreover, even
9
if
if Bauer and Ashburn never performed under the contract, BMA, Bauer
contract, the contract’s direction that BMA,
Ashbum perform the contract in Texas gave EnerQuest sufficient
and Ashburn
and harm might occur
sufficient notice that harm
was a reasonable prospect of litigation there. Zac
in Texas and that there was & Co.,
Zac Smith & Inc. v.
C0,, Inc. v. Otis
Elevator Co., 734 S.W.2d 665-66 (Tex. 1987)
S.W.2d 662, 665–66 when a contract
(finding personal jurisdiction when
1987) (finding
was
was to be performed in Texas, even though performance never occurred).
EnerQuest’s formation of BMIII was
of BMIII was only the beginning of
of the contacts giving rise to the
BMIII was
claims. BMIII
claims. was an ongoing venture that imposed on both parties to work
imposed obligations on work together
The evidence already shows
under the contract. The shows that EnerQuest participated in communications
with its Texas business partner in furtherance of their working relationship and that Olson even
him Antero’s secret drilling schedule.27 These communications (which
asked Bauer to send him
show were
discovery will likely show jurisdiction. See Max
were not isolated) give rise to jurisdiction. 340
Max Protetch, 340
S.W.3d at
S.W.3d at 887 (describing the defendants’
defendants’ regular communications with Texas plaintiff).
plaintiff).
up to
EnerQuest also sent significant payments to its Texas partner and contemplated sending up
twenty million dollars to Texas (with the option to
to increase this
this amount “by additional $10,000,000
tranches”) in furtherance of this business relationship.
relationship.”28
See Burger 478
471 U.S. at 468, 478
Burger King, 471
was
(forming an enterprise in one state to send payments to a corporation in the forum state was
sufficient to confer specific
sufficient jurisdiction). Additionally, when
specific jurisdiction). when EnerQuest sought to take over
management of
management of BMIII, it
it did so through repeated and directed correspondence with Texas
residents.”
residents. 29
EnerQuest cannot credibly claim that it when itit
it has insufficient Texas contacts when
by entering into a seven-year contract to be
of millions of dollars by
contemplated investing tens of
performed in Texas.
27
See Exhibit 3, Olson-Bauer Emails.
23
28
BMlll Agreement
BMIII Agreement §§ 4.5.
29
1D to EnerQuest’s Special Appearance, Letter from Gregory Olson to
See Exhibit 1D to BMI, dated August 9,
9, 2017.
10
10
The extent to which
The which EnerQuest representatives were physically present in Texas in the
of this transaction remains to be
course of be discovered, but even if had never set foot in
if EnerQuest had
make itit amenable to jurisdiction
of its Texas contacts make
Texas, the purposeful and continuous nature of
Supreme Court of Texas has “found jurisdiction over nonresidents with no
here. In fact, the Supreme
physical ties to Texas when an out-of-state contract was formed ‘for
when ‘for the sole purpose of building
in Texas,’ Zac
a hotel in & Co.,
Zac Smith & Inc. v.
Co., Inc. C0,, 734 S.W.2d
v. Otis Elevator Co., 665—66 (Tex. 1987),
S.W.2d 662, 665–66 1987),
and when was executed in
when enrollment for out-of-state school was in Arizona but was ‘actively
‘actively and
successfully solicited’
solicited’ in Texas, Siskind v. Villa Found.
v. Villa Found. for
for Educ.,
Educ., Inc.,
Inc., 642 S.W.2d 434, 437
642 S.W.2d 437 (Tex.
414 S.W.3d
1982).” Moncrief, 414
1982).” S.W.3d at 154. LLC
by arguing that its LLC
154. EnerQuest cannot avoid this result by
agreement chose a law or forum Texas.”
forum other than Texas. 30
“[E]ven
“[E]Ven in instances where was
where a contract was
company with no
signed in another state, an out-of-state company minimum
no physical ties to Texas still has minimum
when itit is clear the company
contacts with Texas when company purposefully directed its activities towards
278 S.W.3d
Texas.” Retamco, 278 S.W.3d at 340.
benefits of
EnerQuest sought the benefits By doing business with a Texas entity,
of a Texas forum. By
profit from work
EnerQuest intended to profit Ashburn performed in Texas. See Max
work Bauer and Ashburn Max
S.W.3d at 887 (finding
Protetch, 340 S.W.3d would
(finding personal jurisdiction and noting that the defendant would
customer). Antero’s misappropriation claim arises
receive a $65,000 payment from a Texas customer). arises
directly BMA, and
directly out of EnerQuest’s communications and connections with Bauer, Ashburn, BMA,
BMIII, providing a substantial connection between EnerQuest’s business contacts with Texas and
of the litigation.
the operative facts of Moki Mac
litigation. See Moki Mac River Expeditions v. S.W.3d 569,
221 S.W.3d
v. Drugg, 221
576, 585 (Tex. 2007).
3"
30
See Smart Cull, LLC.
Smart Call, L.L.C. v. S.W.3d 755, 766 (Tex. App.
Genie Mobile, 349 S.W.3d
v. Genio Holdings, LLC
App. 2011); Citrin Holdings, LLC v.
v.
SW3d 269, 285-86
Minnis, 305 S.W.3d 285-86 (Tex. App. 2009).
ll
11
C. EnerQuest is Subject to Personal Jurisdiction Because
EnerQuest Because it Reached Out to Texas
Reached Out Texas
Furtherance of a Conspiracy.
in Furtherance
The long-arrn statute grants jurisdiction over out-of-state defendants when
The long-arm when their contacts
with Texas in furtherance
fiirtherance of Nat ’l Indus.
of a conspiracy are sufficient to satisfy due process. Nat’l Indus. Sand
Ass’n
Ass ’n v. SW2d 769, 773 (Tex. 1995).
v. Gibson, 897 S.W.2d BMIII Agreement
1995). Here, the BMIII Agreement demonstrates
Ashburn and Bauer acted in service of
Ashburn of BMIII when they acquired and maintained information (in
BMIII when
Texas) intended to justify
justify EnerQuest’s investment in
in West Virginia properties.“
properties. 31 EnerQuest
Ashbum and Bauer to send EnerQuest
specifically contracted for this service, requiring Ashburn
specifically
West Virginia minerals. In addition to soliciting the information,
information relating to the West
knew or should have known
what it knew
EnerQuest accepted what known were
were trade secrets and maintained those
of alerting Antero to the disclosure.
trade secrets in its possession instead of disclosure.”32
On the basis of that information, EnerQuest paid substantial
On sums to Texas to acquire the
substantial sums
Such payments support personal jurisdiction.
ill-gotten property interests. Such jurisdiction. Bissbort v. Wright
v. Wright
& Pub.
Printing & Pub. Co., 801
801 S.W.2d 588, 589 (Tex. App. 1990)
1990) (finding
(finding that,
that, through “the act
act of
of
sum of money
wiring a large sum money to a Texas bank, Wright
Wright has availed itself of
of the protection and
remedies of
of Texas law and Texas courts”).
courts”) EnerQuest’s purposeful and sustained contacts with
of the conspiracy at issue are sufficient to grant personal jurisdiction
Texas in furtherance of jurisdiction over
EnerQuest. See Henkel v. Emjo Investments,
v. Emjo 480 S.W.3d
Investments, Ltd., 480 S.W.3d 1, (finding
l, 7 (Tex. App. 2015) (finding
commit fraud, even though the non-
personal jurisdiction over a non-resident for conspiracy to commit non-
made misrepresentations).
was not alleged to have personally made
resident was
31
31
BMlll Agreement
BMIII Agreement §§ 4.1.
32
See Cox Letter (admitting to
to possession of
of Antero’s trade secret documents for at
at least
least one year).
year).
12
12
D. Over EnerQuest
Personal Jurisdiction Over Comports with Notions of Fair Play
EnerQuest Comports
and Substantial Justice.
and
Finally, exercising jurisdiction of fair
jurisdiction over EnerQuest comports with traditional notions of
and substantial justice.
play and justice. EnerQuest is
is not burdened by jurisdiction here;
by jurisdiction here; EnerQuest’s
Oklahoma City headquarters is nearer to this Court than EnerQuest is to some
Oklahoma some destinations in its
own home
own home state, and nearer to this Court than Houston
Houston is. Moreover, EnerQuest also has
and oil and
businesses and and gas operations in Texas. Second, Texas has a strong interest in adjudicating
the dispute as the major players in the misappropriation did so in Texas, using funding from
make use of Antero’s trade secrets.
EnerQuest to make secrets. Third, adjudicating the dispute in
in Texas would
be and convenient given that all witnesses are located a short drive from
be both effective and from Tarrant
efficient and convenient location for the remainder of the
County. Fourth, Tarrant County is an efficient
parties and witnesses. Spir Star AG
AG v. 310 S.W.3d
v. Kimich, 310 S.W.3d 868, 878 (Tex. 2010); Moncrief, 414
Moncrie/’, 414
S.W.3d at 155.
S.W.3d On balance, requiring EnerQuest to litigate in Texas would
155. On would not offend traditional
of fair play and substantial justice, and personal jurisdiction is proper.
notions of proper.
IV. ANTERO SEEKS
ALTERNATIVELY, ANTERO
ALTERNATIVELY, A CONTINUANCE
SEEKS A CONTINUANCE TO CONDUCT
TO CONDUCT
PERSONAL JURISDICTION DISCOVERY.
PERSONAL JURISDICTION DISCOVERY.
Under Rule 120a(3)
Under ofthe
l20a(3) of the Texas Rules of Civil Procedure, if the party opposing a special
appearance cannot “present by
by affidavit facts
facts essential to justify his
to justify may order
his opposition, the court may
a continuance to permit affidavits to be
be obtained or depositions to be taken or discovery to be had
or may make such other order as
may make as is just.” T
is just.” TEX. CIV.
EX. R. C When the movant
120a(3). When
IV. P. 120a(3). movant seeks a
continuance so it may obtain testimony, “the party applying therefor shall
it may shall make affidavit
affidavit that
that such
showing the materiality thereof, and that he has used due diligence to procure
testimony is material, showing
known . . . .”
such testimony, stating such diligence, and the cause of failure if known . . TEX.
.” T CIV.
EX. R. C
. IV. P. 252.
The Court has discretion to permit discovery on
The BMC Software Belgium,
on a special appearance. BMC Belgium,
13
13
N.
N.V. v. Marchand,
V. v. S.W.3d 789, 800 (Tex. 2002); Barron
Marchand, 83 S.W.3d Barron v. Vanier, 190
v. Vanier, S.W.3d 841, 847 (Tex.
190 S.W.3d
App—Fort Worth
App—Fort Worth 2006, no
no pet.).
pet.).
what the evidence already suggests:
Antero has requested discovery to confirm what suggests: EnerQuest
received or used trade secrets misappropriated by from other Texas
by Texas residents and entities from
hand shows
and entities. Evidence already in hand
residents and shows that EnerQuest deputized Texans
Texans to get
West Virginia minerals and to send that information to EnerQuest so that
information related to West
on the basis of
EnerQuest could invest on of it. Though EnerQuest has not described what
it. Though what information
BMIII acquired, it admits having received Antero’s
of the properties BMIII
it received relating to any of
them for at least one year.
misappropriated documents from Texas and holding them year.”33
EnerQuest does
Ashbum had misappropriated information in Texas about
knowing that Bauer and Ashburn
not deny knowing
BMIII acquired, and EnerQuest does not deny that Bauer
properties BMIII Ashburn represented they
Bauer and Ashburn
knowing that the certain trade
had access to misappropriated information; EnerQuest denies only knowing
secret documents in
in EnerQuest’s possession were obtained by means.”
by unlawful means.
34
However,
TUTSA isis defined
misappropriation under TUTSA defined as “acquisition of
of a trade secret of
of another by
by a person
who knows
who know that
knows or has reason to know that the trade secret was acquired by
by improper means.” T
TEX.
EX.
CIV.
C PRAC.
IV. P & RREM.
RAC. & CODE
EM. C ODE §
§ 134A.002(3). The supposed limit on what
l34A.002(3). The knew is not
what EnerQuest knew
relevant to the jurisdictional
jurisdictional dispute and should not be a basis on which to deny discovery.
on which discovery.
knows that EnerQuest obtained some
In short, while Antero knows some of its trade secrets from Texas,
know the full extent of
Antero does not know how long itit lasted,
when itit started, how
of this misappropriation, when
how EnerQuest profited
and how from it.
profited from it. Antero also does not yet have full visibility on the locations
means by
and means by which meetings—was communicated
which its information—calls, emails, in-person meetings—was communicated to
33
Cox Letter.
See Cox
34
34
Affld. fll
Olson Affid. ¶ 13.
13.
14
14
EnerQuest. Antero therefore cannot provide the Court with the complete litany
litany of
of EnerQuest’s
which deprives Antero of
contacts with Texas, which of the ability to adequately prepare for the special
on these issues is likely
appearance hearing without further discovery. Testimony and discovery on
of EnerQuest’s personal jurisdiction
to generate evidence material to determining the issue of jurisdiction and
permitted. See Lamar
should be permitted. Lamar v. S.W.3d 130,
v. Poncon, 305 S.W.3d 139-40 (Tex.App.-Houston [1st
130, 139–40 [lst
v. Maria
Dist.] 2009, pet. denied); see also Said v. Investments, Inc., No.
Maria Investments, 0l—08—00962—CV, 2010
No. 01–08–00962–CV, 2010
WL 457463, at *3
WL *3 (Tex. App.–Houston
App.—Houston [1st Dist] Feb. 11
[lst Dist.] no pet.) (mem. op.) (observing
11 2010, no
that “Rule 120a(3)
that l20a(3) gives the trial
trial court the discretion to continue a special appearance hearing and
and
may be served”).
which evidence may
thereby extend the time in which
Antero diligently sought this needed information as quickly as possible, serving its
filed its Special Appearance
discovery requests (attached as Exhibit 4) only days after EnerQuest filed Appearance
on April 18.
on 18. Rather than responding to reasonable jurisdictional
jurisdictional discovery, EnerQuest noticed its
special appearance for a hearing in an attempt to insure Antero does not obtain full discovery on
EnerQuest’s contacts and knowledge, which
which cannot be procured from another source. Antero is
on this jurisdictional
therefore entitled to a continuance to obtain discovery on 321
jurisdictional issue. In re Stern, 321
S.W.3d 828, 839 (Tex. App. 2010) (“The trial may permit a continuance so that
trial court may that the opposing
party may obtain the necessary jurisdictional
party may jurisdictional discovery.”).
discovery”).
V. AND PRAYER
CONCLUSION AND
CONCLUSION PRAYER
Intervenor
lntervenor Antero Resources Corporation requests that
that the Court overrule EnerQuest’s
special appearance, or alternatively, continue the hearing on same until jurisdictional
on same jurisdictional discovery
can be obtained, and grant Antero such additional and further relief which it
relief to which may show
it may show itself
entitled.
l5
15
Respectfully submitted,
STEPTOE
S & JJOHNSON
TEPTOE & PLLC
OHNSON PLLC
By: /s/Jason
/s/ Jason R.
R. Grill
Jason R. Grill
24002185
Bar No. 24002185
State Bar
j ason. gri1l@steptoe—johnson.com
jason.grill@steptoe-johnson.com
W. Henry Lawrence
W. Lawrence
WV
WV State Bar No. 2156
No. 2156
Woodloch Forest Drive, Suite 300
10001 Woodloch
10001
The Woodlands, Texas 77380
The 77380
281.203.5700
281.203.5701 (facsimile)
281.203.5701
VINSON
V & EELKINS
INSON & LLP
LKINS LLP
By: /s/ B. Dye
/s/ Phillip B. Dye
Dye, Jr.
Phillip B. Dye,
State Bar No. 06311500
No. 06311500
pdye@Velaw.com
pdye@velaw.com
Jason M.M. Powers
Powers
State Bar No. 24007867
No. 24007867
jpowers@Velaw.c0m
jpowers@velaw.com
Caroline C. Stewart
State Bar No. 24098477
No. 24098477
cstewart@Velaw.com
cstewart@velaw.com
2500
1001 Fannin Street, Suite 2500
1001
Houston, TXTX 77002-6760
77002-6760
713.758.2222
713.758.2346 (facsimile)
ATTORNEYS
A FOR IINTERVENOR
TTORNEYS FOR NTERVENOR
16
16
CERTIFICATE OF
CERTIFICATE CONFERENCE
OF CONFERENCE
May 11 and May
on May
I hereby certify that on May 2, 2018, I conferred by
by telephone and e-mail with
Spencer Smith, counsel for EnerQuest, regarding the merits of of Antero’s alternative motion to to
continue the hearing on EnerQuest’s special appearance. A A reasonable effort
effort has been made to
resolve the motion to continue without the necessity of court intervention and the effort failed, as
EnerQuest would not agree to Antero’s request. Therefore, this
this dispute is
is presented to
to the Court
determination.
for determination.
/s/Jason M.
_/s/Jason Powers
M. Powers_________________
M. Powers
Jason M. Powers
CERTIFICATE OF SERVICE
CERTIFICATE OF SERVICE
copy of
I hereby certify that a true and correct copy document has been forwarded
of the foregoing document
below via E-service
to all parties listed below E—service and/or via facsimile, on 2nd day of
on this the 2nd May, 2018:
of May,
Via E-Service: ghamm@hammflrm.c-am
Via ghamm@hammfirm.com Via apenningt0n@phl1law.c0m
Via E-Service: apennington@phblaw.com
Gene Hamm, II
Gene A. Hamm, 11 H. Allen Pennington, Jr.
Hamm Firm
The Hamm
The Firm Matthew Germany
Matthew D. Germany
W. McDermott,
1333 W.
1333 200
McDerrnott, Suite 200 LLP
Pennington Hill, LLP
75013
Allen, Texas 75013 Tindall Square —– Warehouse
Warehouse No.
No. 3
Attorney for Plaintiff, Penn
Attorneyfor Penn 101
509 Pecan Street, Suite 101
Funds, LLC
Investment Funds, and New
LLC and New Defendants Fort Worth, Texas
Venture II, LLC
Venture Strong II, LLC and F Penn
and Joe F..Penn Jr.
Jr. for Defendants John
Attorneys for John Bradley
Ashburn
Ashburn and New Defendant Post Oak
and New Oak
Appalachia, LLC
Appalachia, LLC
Via E-Service:
Via Via E-Service:
Via E-Service: avery@averymcdaniel.com
mhassett@tarrantbusinesslaw.com
mhassett@tarrantbusinesslaw.com McDaniel
Avery McDaniel
Michael Hassett Law Office
Law Office of McDaniel
Avery McDaniel
of Avery
PC
Jones Hassett, PC Main Street
1205 N. Main
1205
440 North Center
440 76164
Fort Worth, Texas 76164
7601 1
Arlington, Texas 76011 Attorney for II, LLC
for Braxton Minerals II, LLC
Attorney for Fisher,
for Defendants Michael Fisher,
Maegan
Maegan Fisher and M&M
and M&M Consulting
Via E-Service: Scott@braxtonenergy.
Via Scott@braxtonenergy.comcom Via E-Service:
Via awoodward@hrepc.com
E-Service: awoodward@hrepc.com
R. Scott Bauer C. Andrew Woodward
Andrew Woodward
Camp Bowie
8851 Camp
8851 Bowie Boulevard WW Holman Robertson Eldridge
Holman
200
Suite 200 8226 Douglas Ave.,
8226 550
AVe., Suite 550
76116
Fort Worth, Texas 76116 75225
Dallas, Texas 75225
Attorney forfor Braxton Acquisitions,
Acquisitions, LLC,‘
LLC; Attorney for 0 ’Connor
for Kelly O’Connor
LLC and
Energy, LLC
Braxton Energy, and R. Bauer
R. Scott Bauer
Via r0landjohnson@hfblaw.c0m
Via E-Service: rolandjohnson@hfblaw.com Via E-Service: j0e.c0x@bracewell.c0m
Via joe.cox@bracewell.com
Roland K. Johnson
Roland Joseph M. Cox and Andrea
M. Cox Andrea D. Broyles
Harris, Finley && Bogle, PC
PC 1445 Ross Avenue, Suite 3800
1445 3800
Main Street, Suite 1800
777 Main 1800 75202
Dallas, Texas 75202
76102
Fort Worth, Texas 76102 Spencer F. Smith
for Energy Corporation of
Attorney for ofAmerica
America McAfee &
McAfee & Taft
21 1 N.
211 Robinson Ave.
N. Robinson
Oklahoma City, Oklahoma
Oklahoma Oklahoma 73102.
Attorneys for
for EnerQuest Oil & & Gas,
Gas, L.L.C.
L.L.C.
and III, LLC
and Braxton Minerals III, LLC
Via E-Service: jnt@turnerandallen.com
Via E—Service.' jnt@turnerandallen.com Via
Via E-Service: cd@peebleslaw.com
Jess N. Turner, III C.D. Peebles
Turner && Allen, P.C. The Law Firm
The Peebles Law Firm
Box 930
P.O. Box Devon Court
1604 Devon
1604
76450
Graham, Texas 76450 Southlake, TXTX 76092
76092
Attorney for Energy, LLC
for Turn 2 Energy, LLC for Austin Fox
Attorney for Fox
Via E
Via brad@p0st0akr0yalty.c0m
-Service: brad@postoakroyalty.com
E-Service:
Ashbum
Brad Ashburn
Brad
100 N. Forest Park Blvd.,
100 201
BlVd., Suite 201
76102
Fort Worth, Texas 76102
for Braxton Minerals-Appalachia,
Attorney for Minerals-Appalachia,
LLC
LLC
_/s/
/s/ Caroline C. Stewart
C. Stewart_________________
CAROLINE
C AROLINE C. SSTEWART
TEWART
CAUSE NO. 141-290089-17
PENN INVESTMENT FUNDS, LLC, § IN THE DISTRICT COURT OF
Plaintiff §
§
ANTERO RESOURCES CORPORATION, §
Intervenor §
§
VS. 52‘
§
BRAXTON ENERGY, LLC, §
BRAXTON ACQUISITIONS, LLC, §
BRAXTON MINERALS II, LLC, §
ROBERT SCOTT BAUER, JOHN §
BRADLEY ASHBURN, MICHAEL §
FISHER, MAEGEN FISHER AND §
M&M CONSULTING, §
§
Original Defendants § 141st JUDICIAL DISTRICT
§
§
AUSTIN FOX, JOE F. PENN JR., §
BRAXTON MINERALS III, VENTURE §
STRONG II LLC, POST OAK §
APPALACHIA LLC, TURN 2 ENERGY §
LLC, BRAXTON—MINERALS §
APPALACHIA LLC, AND ENERGY §
CORPORATION OF AMERICA, §
ENERQUEST OIL & GAS, L.L.C., §
§
New Defendants. § TARRANT COUNTY, TEXAS
AFFIDAVIT AND VERIFICATION
STATE OF TEXAS §
COUNTY OF HARRIS E
BEFORE ME, the undersigned authority, on this day personally appeared Jason R. Grill
who, after being duly sworn upon his oath, stated as follows:
Exhibit 1
BRACEWELL
April 26, 2018
Jason Grill
Steptoe & Johnson
10001 Woodloch Forest Drive, Suite 300
The Woodlands, Texas 77380
Re: Cause No. 141-290089-17; Penn Investment Funds, LLC v. Braxton Energy, LLC et al; in the 141'
Judicial District Court of Tarrant County, Texas
Dear Jason:
Pursuant to the Rule 11 Agreement entered into on April 17, 2018 between counsel for Antero Resources
Corporation ("Antero") and counsel for EnerQuest Oil and Gas, LLC ("EnerQuest") and Braxton Minerals
Ill, LLC ("BMW"), EnerQuest and BMW are required to provide notice of any Trade Secret Documents of
Antero in their possession and provide copies of any such Trade Secret Documents to Antero's counsel.
By email on March 5, 2018, EnerQuest's counsel provided a copy of all of the Trade Secret Documents of
Antero in its possession (including as manager of BMW) to you and Hank Lawrence, through two zip files
and a ShareFile link. A copy of the March 5, 2018 email is attached hereto. All of the information included
in that email was received by EnerQuest and/or BMW during or after February 2017 from Scott Bauer.
The March 5, 2018 email includes all the Trade Secret Documents of Antero in the possession of EnerQuest
or BMW, and no additional Trade Secret Documents have come into their possession since March 5, 2018.
While EnerQuest and BMW have provided all of the Trade Secret Documents in their possession,
EnerQuest and BMW have no knowledge or control over what Scott Bauer, Brad Ashburn, or their entity,
Braxton Minerals-Appalachia, LLC, have in their possession.
The only EnerQuest employees that have viewed the Trade Secret Documents are Greg Olson and Matt
Mollman, each of whom made only a cursory review of the information and did not use the Trade Secret
Documents to make any business decisions. The Trade Secret Documents have not been shared with any
person or entity other than: (1) EnerQuest and BMW's attorneys in the above-referenced litigation, (2)
Scott Bauer, and (3) Brad Ashburn, pursuant to a subpoena issued by Ashburn's counsel prior to the
involvement of EnerQuest or BMIll in the above-referenced litigation.
Joseph M. Cox T: +1.214.758.1077 F: +1.800.404.3970
Partner 1445 Ross Avenue, Suite 3800, Dallas, Texas 75202-2724
joe.cox@bracewell.com bracewell.com
AUSTIN #5%ltrtEI-.3TICUT DALLAS DUBAI HOUSTON LONDON NEW YORK SAN ANTONIO SEATTLE WASHINGTON, DC
BRACEWELL
Jason Grill
April 26, 2018
Page 2
Please let me know if you have any questions or would like to discuss any of the information contained in
this letter.
Very tr y yours,
Josep. M. Cox
Part
Enclosure
AUSTIN # 5 %1 E7C3TICUT DALLAS DUBAI HOUSTON LONDON NEW YORK SAN ANTONIO SEATTLE WASHINGTON, DC
BRACEWELL
Jason Grill
April 26, 2018
Page 3
Cc:
H. Allen Pennington, Jr. Phillip B. Dye, Jr.
Matthew D. Germany Jason M. Powers
Pennington Hill, LLP Caroline C. Stewart
Tindall Square-Warehouse No. 3 Vinson & Elkins LLP
509 Pecan Street, Suite 101 1001 Fannin Street, Suite 2500
Fort Worth, Texas 76102 Houston, Texas 77002-6760
apennington@phblaw.com pdye@velaw.com
Attorneys for Defendant John Bradley Ashburn jpowers@velaw.com
and Post Oak Appalachia, LLC cstewart@velaw.com
Attorneys for Intervenor Antero Resources
Corporation
Gene A. Hamm, II Roland K. Johnson
The Hamm Firm Harris, Finley & Bogle, P.C.
1333 W. McDermott, Suite 200 777 Main Street, Suite 1800
Allen, Texas 75013 Fort Worth, Texas 76102
ghamm@hammfirm.com rolandjohnson@hfblaw.com
Attorney for Plaintiff Penn Investment Funds, Attorneys for Energy Corporation of America
LLC, Joe F. Penn Jr., and Venture Strong II, LLC
Michael Hassett Avery McDaniel
Jones Hasset, PC Law Office of Avery McDaniel
440 North Center 1205 N. Main Street
Arlington, Texas 76011 Fort Worth, Texas 76164
mhasset@tarrantbusinesslaw.com avery@avrymcdaniel.conn
Attorney for Defendants Michael Fisher, Maegan Attorney for Braxton Minerals II, LLC
Fisher, and M&M Consulting
R. Scott Bauer C. Andrew Woodward
8851 Camp Bowie Boulevard W Holman Robertson Eldridge
Suite 200 8226 Douglas Ave., Suite 550
Fort Worth, Texas Dallas, Texas 75225
scott@braxtonenergy.com awoodward@hrepc.com
Attorney for Braxton Acquisitions, LLC, Braxton Attorney for Kelly O'Connor
Energy LLC, and himself
Charles W. Sartain
Gray Reed & McGraw
1601 Elm Street, Suite 4600
Dallas, Texas 75201
Attorneys for Global Oil and Gas Fields
AUSTIN #56gypSTICUT DALLAS DUBAI. HOUSTON LONDON NEW YORK SAN ANTONIO SEATTLE WASHINGTON, DC
Attachments: Emails.zia
Text.zip
Attachments.html
From: Black, Jeremy
Sent: Monday, March 05, 2018 2:59 PM
To: 'Hank Lawrence'
Cc: Jason Grill
Subject: RE: Braxton - letter to Jeremy Black (2/23/18)
Hank,
In response to Antero's letter dated 2/23/18, EnerQuest has reviewed the materials in its possession
or control including (1) various correspondence (email and texts messages) and (2) paper files
EnerQuest received upon taking over the management of BMII I from Braxton Minerals-Appalachia,
LLC ("BMA"). The focus of EnerQuest's review was to determine whether any of Antero's
confidential and proprietary business records and trade secret information was shared with
EnerQuest. Included with this email are the following materials:
1. A zip file containing six (6) emails involving Scott Bauer which reference and/or include a
Critical Date Report and/or drilling schedule.
2. A zip file containing a text message exchange between Scott Bauer and Greg Olson w/
EnerQuest that includes a screen shot of a drill schedule.
3. A ShareFile link whereby certain additional information that was sent by Scott Bauer to Greg
Olson w/ EnerQuest via Dropbox. These are being shared via ShareFile due to the size of the
files.
It is EnerQuest's belief that all of the information included in this email was received by EnerQuest in
February 2017 (or later) and this information was shared by Scott Bauer in conjunction with Scott
Bauer's attempt to have EnerQuest commit additional funds to his mineral acquisition program. As
background, BMIII is the only mineral acquisition venture sponsored by Scott Bauer or Brad Ashburn
(or any of their affiliated entities) in which EnerQuest has participated. BMIII acquired all of its
minerals between November 2015 and April 2016, almost a year before any of the materials
referenced in this email were provided by Scott Bauer to EnerQuest. EnerQuest has not shared this
information with any party other than Scott Bauer and Brad Ashburn.
Please let me know if you have any questions about or otherwise would like to discuss anything
included in this response.
Regards,
Jeremy
ShareFile Attachments
Title Size
EQ Response to Antero Letter Dated 2-23-18 589.8 MB
Jeremy Black uses ShareFile to share documents securely. Learn More.
Exhibit 2
1
1 REPORTER'S RECORD
2 VOLUME 1 OF 1
3 Cause No. 141-290089-17
4 PENN INVESTMENT FUNDS, X IN THE DISTRICT COURT
LLC, X
5 Plaintiff, X
ANTERO RESOURCES X
6 CORPORATION, X
Intervenor X
7 X
VS. X 141ST JUDICIAL DISTRICT
8 X
BRAXTON ENERGY, LLC, X
9 BRAXTON ACQUISITIONS, X
LLC, BRAXTON MINERALS X
10 II, LLC, ROBERT SCOTT X
BAUER, JOHN BRADLEY X
11 ASHBURN, MICHAEL X
FISHER, MAEGEN FISHER, X
12 M&M CONSULTING and X
KELLY O'CONNOR X
13 Defendants. X TARRANT COUNTY, TEXAS
14
15 *-*-*-*-*-*-*-*-*-*-*-*-*-*
16 TEMPORARY INJUNCTION HEARING
17 *-*-*-*-*-*-*-*-*-*-*-*-*-*
18
19 BE IT REMEMBERED that on the 14th day of June,
20 2017, the following proceedings came on to be heard in
21 the above-entitled and -numbered cause before the
22 Honorable John P. Chupp, judge presiding, held in Fort
23 Worth, Tarrant County, Texas.
24 The proceedings were reported by machine
25 shorthand.
Tina Fett, CSR
Official Court Reporter 141st District Court
36
1 defected acreage on the Southwestern acquisition that
2 was defected b-c, assume that's because, leases
3 expired; is that correct?
4 A. It does say that, yes.
5 Q. Is that correct, did Kelly O'Connor give
6 you the Southwestern defect report?
7 A. I generated it prior. No, I didn't have
8 it -- I mean, I generated it on my own, but I wanted
9 to -- I'll say I overstepped my bounds and wanted to
10 make sure Joe was comfortable with the investment.
11 Q. So is it your testimony, sir, that Kelly
12 O'Connor did not give you the Southwestern defect
13 report?
14 A. Yes, sir.
15 Q. So the statement in this email to Mr. Penn
16 is false, the statement in the second sentence?
17 A. Yes, sir. Mr. Penn had become very
18 difficult at this point. I was working for free, he
19 gave me a release, supposedly, from this case.
20 MR. HAMM: Objection. Nonresponsive.
21 THE COURT: Sustained.
22 Q. (By Mr. Lawrence) Why did you tell
23 Mr. Penn that Kelly O'Connor gave you the Southwestern
24 defect report?
25 A. He was looking to invest other money in the
Tina Fett, CSR
Official Court Reporter 141st District Court
37
1 deal. I was making him money on deals, and then I
2 wanted to keep it rolling, and so I overstepped my
3 bounds.
4 Q. I'll put up a text that was identified as
5 Penn 153 --
6 A. Yes, sir.
7 Q. -- it's part of a text messages that you
8 sent to Mr. Penn. Have you reviewed the documents
9 that were produced by Penn Investment in discovery?
10 A. Yes, sir, most of them.
11 Q. So the email that I just showed you,
12 Exhibit 8, you are familiar with?
13 A. Yes, I knew this was coming -- or, yes, I
14 knew the stuff that was put in these messages were not
15 flattering in any way and looked different than they
16 are.
17 Q. Did you find this email on your server or
18 on any of your computers when you searched for
19 documents responsive to the subpoena duces tecum?
20 A. No, I couldn't find any of my emails as we
21 did the pull back.
22 Q. I'm sorry, let me clarify the question.
23 Not whether you found any, did you
24 perform a search for emails on your computers and
25 server such as this email, Exhibit 8?
Tina Fett, CSR
Official Court Reporter 141st District Court
Exhibit 3
From: Scott Bauer
Sent: Thursday, February 16, 2017 6:57 PM
To: Greg Olson
Subject: Re: WV aoi maps
Hey Greg,
I can send the drill schedule, but as of now, the dates on when mineral owners get paid is not something listed,
the date of expected first production is, but we have in our order for payment, if a royalty check is received
during our due diligence period, we don't close. We keep track of when checks are going out and I have a
contact now that will let me know if a unit is in pay status. Jacob was asking me about the map today, He said
should I take out what is in pay, I told him no bc you really want to see the area as whole, but we won't pay for
anything that is in pay status and I confirm every acre before we buy with my contact at Antero. She keeps me
up to date if a division order is about to be mailed and what goes into pay status to the mineral owner. I don't
keep the drill schedule digital, I keep it on my person at all times, bc its one of my prize possessions. I don't
have a scanner here that will feed that size paper, but I'll get it done tonight.
Our deeds are clear on first production and Antero actually has instructed the division order department to star
every Braxton deed and interest bc they know of our unique language. They actually complimented us on
it. We've had two issues ever that have arisen, each where easy to handle, the deed was filed in between the last
revision to interests and checks being cut, and that was when Brad filed some deeds later than the effective date,
just didn't get them in for some reason, but in both instances, the landowners quickly returned the checks to
Antero and Antero re-issued us checks. That won't happen with our filing system. I have a law firm that I have
referred a lot of business to that has made their runners at my disposal. They have four offices, so I can have
deeds filed same day every time, and I'm not waiting for a mailed deed, I am taking the deed in person. But
before a single dollar exchanges, I will have confirmation from Antero, they give me weekly updates on what
division orders are going out and what is going into pay. But they don't know the date that they are going to get
cleared for pay until maybe two weeks out, but we know its usually 30 days from the division orders, so we stay
just ahead of those so the division order comes to us. But as important, I make it part of an order for payment
that they sign and I sign, that we are entitled to those royalties. But simple answer, I stay ahead of division
orders and if they are sent, I confirm the hell out of the pay status. I won't miss on that, that is one thing I am
very clear on makes the economics. So this is something I don't take chances on and will loop you in if the DO
has been sent out. But we know who is getting paid and who isn't and keep a running list of every unit and have
them prioritized based on dates as well. We keep track in about three different list that we cross reference, but
most importantly we have it contracted and have updates from Antero. They can tell you as detailed of info as I
had on the critical well status sheet, but they can't tell you that far out when they will pay. Kelly, the President
of TEXHOMA said Antero wants them to be down to 6 months by the end of the year, Kelly said he needs
more guys to reach that level consistently.
Scott Bauer, CEO
Braxton Energy, LLC
(817) 698-0020 office
(817) 905-7268 cell
scott@braxtonenergy.com
On Feb 16, 2017, at 5:42 PM, Greg Olson wrote:
1
Scott, could you send me the drill schedule? I’d like to see how the AOI wells are
scheduled. Also, if a well has been drilled, how do we get comfortable with the
notion that we’ll get paid back to date of first production. I’m putting the final
touches on a proposed letter of intent but would like to address the matters before
sending to you.
Gregory W. Olson
President
EnerQuest Oil & Gas, LLC
12368 Market Drive
Oklahoma City, OK 73114
(405) 478-3300 ext. 101
From: Matt Mollman
Sent: Thursday, February 16, 2017 2:19 PM
To: Greg Olson
Cc: Aaron Ivey
Subject: FW: WV aoi maps
Greg,
Attached is a quick base map I put together using the information Jacob sent today. Please note the
following:
1) The oil and gas well symbols are limited to active producing wells.
2) If the wellbore stick is straight it is just a permit or a well that has no directional data filed with
the State.
3) If the wellbore stick is curved the well has been drilled and directional data is on file with the
State.
4) If the wellbore stick does not have a gas well symbol at the end of it then the well was not an
active producing well at the end of 2015.
Matt
From: Jacob Patrylick [mailto:Jacob.Patrylick@braxtonenergy.com]
Sent: Thursday, February 16, 2017 11:32 AM
To: Matt Mollman ; Scott Bauer ; Greg Olson
Subject: Re: WV aoi maps
Matt,
To start, here are two shapes and a map. First are the units you request and second is a rough
outline of the AOI we would like to present because not all of the unit declarations have been
filed with the county. There are a few other company priority units based on drill dates. We are
starting withe the Monroe as first focus area and the other sent are ares will be hitting very
soon. https://www.dropbox.com/s/ksjyxk128u3xett/WV_Braxton_43x70_Enerquest_AOI_map
.pdf?dl=0
2
WV_Braxton_43x70_Enerquest_AOI_map.pdf
Right-click or tap and hold here to download pictures. To help protect y our privacy , O utlook prevented automatic download of this picture from
the Internet.
www.dropbox.com
Shared with Dropbox
Thanks,
Jacob
From: Matt Mollman
Sent: Thursday, February 16, 2017 10:02:09 AM
To: Jacob Patrylick; Scott Bauer; Greg Olson
Subject: RE: WV aoi maps
Jacob,
I think we can get things moving along quicker if you could forward a shapefile that only contains the
Units in the vicinity of where Scott is working with Greg to define an AOI for purchasing additional
minerals. If you have any questions please give me a call.
Matt Mollman
Vice President
EnerQuest Oil & Gas, LLC
12368 Market Dr
Oklahoma City, OK 73114
Office: 405-478-3300 ext 102
3
Cell: 405-760-3896
From: Jacob Patrylick [mailto:Jacob.Patrylick@braxtonenergy.com]
Sent: Monday, February 13, 2017 11:58 AM
To: Scott Bauer ; Greg Olson ; Matt Mollman
Subject: WV aoi maps
Gentlemen,
Here are links to aoi maps in West Virginia.
Overview map is kinda large file.
WV_Braxton_43x70_2+bcf_60k.pdf
Smaller area maps
WV_Braxton_13x19_Monroe_aoimap.pdf
WV_Braxton_13x19_Noland_aoimap.pdf
WV_Braxton_13x19_Hamilton_aoimap.pdf
WV_Braxton_13x19_Davis_aoimap.pdf
Best regards,
Jacob
4
Exhibit 4
141-290089-17
CAUSE NO. 141-290089-17
PENN INVESTMENT FUNDS, LLC, § IN THE DISTRICT COURT OF
Plaintiff §
§
ANTERO RESOURCES CORPORATION, §
Intervenor §
§
VS. §
§
BRAXTON ENERGY, LLC, §
BRAXTON ACQUISITIONS, LLC, §
BRAXTON MINERALS II, LLC, §
ROBERT SCOTT BAUER, JOHN §
BRADLEY ASHBURN, MICHAEL §
FISHER, MAEGEN FISHER AND §
M&M CONSULTING, §
§
Original Defendants § 141st JUDICIAL DISTRICT
§
§
AUSTIN FOX, JOE F. PENN JR., §
BRAXTON MINERALS III, VENTURE §
STRONG II LLC, POST OAK §
APPALACHIA LLC, TURN 2 ENERGY §
LLC, BRAXTON-MINERALS §
APPALACHIA LLC, AND ENERGY §
CORPORATION OF AMERICA, §
ENERQUEST OIL & GAS, L.L.C., §
§
New Defendants. § TARRANT COUNTY, TEXAS
INTERVENOR ANTERO RESOURCES CORPORATION’S FIRST
SET OF INTERROGATORIES AND REQUESTS FOR PRODUCTION
TO ENERQUEST OIL & GAS, L.L.C.
TO: Defendant EnerQuest Oil & Gas, L.L.C., by and through its attorneys of record, Joseph M.
Cox and Andrea D. Broyles, 1445 Ross Avenue, Suite 3800, Dallas, Texas 75202, and
Spencer F. Smith, McAfee & Taft, 211 N. Robinson Ave. Oklahoma City, Oklahoma
73102.
Pursuant to Rules 192, 196 and 197 of the Texas Rules of Civil Procedure, Antero
Resources Corporation (“Antero”), Intervenor in the above-captioned case, serves upon Defendant
EnerQuest Oil & Gas, L.L.C. (“EnerQuest”), the following interrogatories and requests for
production, the answers to which shall be made under oath separately and fully in writing within
thirty (30) days after the date of service of these interrogatories and requests for production and
shall be given to the undersigned counsel of record.
I.
INSTRUCTIONS
1. Unless otherwise specified, produce all requested documents in your possession,
custody, or control. Without limitation, a document is deemed to be in your control if you have the
right to secure the document or a copy thereof from another person or public or private entity
having actual possession thereof. Such documents include any documents that you do now or did
at any time during the period covered by these requests maintain or keep in personal files, private
papers, electronic storage or devices, homes, personal automobiles, or anywhere else on or off
your premises.
2. If you have in your possession, custody, or control a copy of a requested document,
but not an original, please so state and produce the copy.
3. In lieu of producing original documents which are in your possession, custody, or
control, you may produce copies provided that the copies are accurate and complete copies of
original documents and provided that the originals are preserved and made accessible upon request
during this or any subsequent proceeding.
4. If any document is responsive to a request for production and was, but is no longer,
in your possession or custody or subject to your control, state what disposition was made of it and
why, who disposed of the document, and the date(s) (or approximate date(s)) on which the
document was disposed.
5. If any request asks for documents that are no longer in existence, identify the
request and, with respect thereto:
a. identify all such documents;
b. state the time period during which such documents were maintained;
c. state the circumstances under which such documents ceased to exist;
d. state the date when such documents ceased to exist;
e. identify all persons having knowledge of the circumstances under which
such documents ceased to exist; and
f. identify all persons who have knowledge or had knowledge of the
documents and the contents thereof.
2
6. If any documents called for in response to any of these requests were furnished in
response to another of these requests, or in response to previous requests of any party to this action,
they need not be furnished again. Indicate, however, what the documents are and pursuant to which
of those requests they were produced.
7. For each document withheld under a claim of privilege, state:
a. the name and title of the author(s);
b. the name and title of the person(s) to whom a copy of the document was
sent or to whom any part of the document or a copy was shown;
c. the date of the document;
d. the name and title of the person(s) to whom the document was addressed;
e. the number of pages;
f. a brief description of the subject matter;
g. the nature of the privilege claimed;
h. the facts that support such claim of privilege; and
i. the request(s) to which the document is otherwise responsive.
8. When a person is referred to or identified in an answer to an interrogatory, or
identified as a source or partial source of an answer, set forth with respect to each such person: (1)
his or her full name, employer, and position at the time in question, (2) his or her present employer
and position, and (3) his or her present business and home address.
9. When a corporation, firm or other entity is referred to or identified in an answer to
an interrogatory, or as a source or partial source of an answer, set forth with respect to such entity:
(1) the full name of such entity, and (2) the address of such entity.
10. When a document is referred to or identified in an answer to an interrogatory, or as
a source or partial source of an answer, set forth with respect to such document: (1) the identity
of each person who either wholly or in part originated, initialed, signed, prepared or revised (and
if the same was done on behalf of any person, the identity of such person), or who is referred to in
any way on the face or back of such document, (2) the date of such document, (3) the type of
document, (4) any identifying numbers on the face or back of such document, (5) the substance of
such document, (6) the identity and location of each person who has possession, custody or control
over each copy of such document, including, if such person is not an individual, the person
exercising such possession, custody or control on behalf of such, and if such document has been
destroyed or otherwise disposed, identify as herein required each person who destroyed or
otherwise disposed of such document or who directed or participated in such destruction or other
disposal of such document, and (7) if any document ever existed which referred or related to such
3
document, identify as herein required each such document which referred or related to such
document.
11. Wherever an oral communication is referred to or identified in answer to any
interrogatory, or as a source or partial source of an answer: (1) identify each person participating
in or present during all or part of such oral communication and specify the date, time of day and
duration of such oral communication, (2) state whether such oral communication took place in a
face-to-face meeting or by means of a telephone, radio or other means of communication, (3) state
the substance of what was said by each person during such oral communication, and (4) identify
each document relating or referring to such oral communication.
12. With respect to and as part of the answer to each interrogatory, state whether the
answer is given upon personal knowledge and, if so, identify each person upon whose knowledge
the answer is given. If any answer is not given upon personal knowledge, identify the source of
the information and belief. If any answer is based upon documents, identify each such document.
If any answer is based upon oral communications, identify each such oral communication.
13. All interrogatories herein are continuing and are to be supplemented to the fullest
extent required by the Texas Rules of Civil Procedure. Intervenor reserves the right to serve further
interrogatories.
14. If you are asked to identify a document or an oral communication and object to
identifying or to describing the document or oral communication because it allegedly constitutes
privileged matter or work product, or is otherwise allegedly protected from discovery, you must
still identify the document or oral communication in accordance with the definitions and
instructions herein, except that instead of fully describing the substance of the document or oral
communication for which privileged is claimed, you must describe the subject of the document or
oral communication to the fullest extent consistent with the privilege or protection claimed, and
you must hold the document or evidence of such oral communication subject to the further orders
of the Court.
II.
DEFINITIONS
1. “Antero” and “Intervenor” shall mean Intervenor, Antero Resources Corporation.
2. “BMA” means Braxton Minerals-Appalachia LLC and any of its employees,
officers, directors, agents, or contractors.
3. “BMII” means Braxton Minerals II and any of its employees, officers, directors,
agents, or contractors.
4. “BMIII” means Braxton Minerals III and any of its employees, officers, directors,
agents, or contractors.
5. “Communication” means a transmission from one person to another or in the
presence of another, whether written, oral, telephonic, electronic or by any other means, including
text messages.
4
6. “Defendants” shall mean Braxton Energy, LLC, Braxton Acquisitions, LLC,
Braxton Minerals II, LLC, Robert Scott Bauer, John Bradley Ashburn, Michael Fisher, Maegan
Fisher, M&M Consulting, Kelly O’Connor, Austin Fox, Joe F. Penn Jr., Braxton Minerals III,
Venture Strong II LLC, Post Oak Appalachia LLC, Turn 2 Energy LLC, Braxton-Minerals,
Appalachia LLC, Energy Corporation of America, EnerQuest, and any other persons or entities
acting or purporting to act on their respective behalf.
7. “Document” means any printed, type-written or handwritten instrument of
whatever character where the physical expression of any means of storage of information and
includes, without limitation, any correspondence, memorandum, agreement, letter, hand or type
written note, computer printout, computer tape, microfilm, microfiche, tape recording, photograph,
motion picture, plat, diagram, survey, voice tapes, recordings, computer information, including
but not limited to the text of e-mails, and other items of a similar nature, originals and non-identical
copies and where originals and/or non-identical copies are in existence, a copy of the original and
copy of all non-identical copies.
8. “Identify” means the following unless additional information is requested in a
given interrogatory:
a. With respect to a natural person, “identify” means to state the person’s full
name, present employer, title, job description, business and home addresses and telephone
numbers, and the person’s relationship, if any, with any party to this action;
b. With respect to a person other than a natural person including any business
entity, “identify” means to include its name, its address “all business addresses,” its date
and place of formation, the type of legal entity which it is, and its chief executive officer;
c. With respect to a “document,” “identify” means to state its title, date,
author, addressee, recipient, subject matter or general nature, present location and
custodian. Such documents shall be so identified whether or not the documents are in the
possession of you or your attorney and whether or not the document is privileged; and
d. With respect to oral statements or communications, identification means to
state the maker, recipient, the date made, the place made, the persons present when the
communication was made, the mode of communication, the subject matter, and the date of
the communication.
9. “Person” means the plural as well as the singular and includes, without limitation,
any natural person as well as any firm, corporation, unincorporated association, partnership of any
kind, or any other form of legal entity unless the context clearly indicates otherwise.
10. The “Lawsuit” means the case styled Cause No. 141-290089-17; Penn Investment
Funds, LLC, Plaintiff and Antero Resources Corporation, Intervenor v. Braxton Energy, LLC, et
al.; in the 141st Judicial District Court of Tarrant County, Texas.
11. “Trade Secret Documents” means:
a. Antero’s Critical Date Report dated November 15, 2016;
5
b. Any other Antero Critical Date Reports;
c. The SWN June 2016 Acquisition Defects Report;
d. Real Property Title Opinions prepared by Antero’s attorneys;
e. All other documents setting forth Antero’s plans to drill wells, operate wells, form
units, or acquire oil and gas interests;
f. All other forms and types of information, including business, scientific, technical,
economic, or engineering information, and any formula, design, prototype, pattern,
plan, compilation, program device, program, code, device, method, technique,
process, procedure, financial data, or list of actual or potential customers or
suppliers, whether tangible or intangible and whether or how stored, compiled, or
memorialized physically, electronically, graphically, photographically, created by
or for Antero or its agents, attorneys, contractors, or similar personnel, not generally
known or readily ascertainable through proper means by persons other than Antero
and Texhoma Land Consultants I, Inc.
12. “Texhoma” means Texhoma Land Consultants I Inc. and any of its employees or
contractors.
13. “Trade Secret Information” means any information embodied in a Trade Secret
Document.
14. “You” or “Your” shall mean EnerQuest (together with its respective agents,
employees, attorneys, affiliates, members, officers, directors, predecessors, successors, assigns,
and any other person or entity acting or purporting to act on behalf of any of them) answering
Antero’s written discovery requests.
III.
INTERROGATORIES
INTERROGATORY NO. 1
Identify any and all persons who have knowledge of EnerQuest’s contacts with the State of Texas,
including, but not limited to, persons located in or residents of the State of Texas.
ANSWER:
INTERROGATORY NO. 2
Identify any and all persons who have knowledge of EnerQuest’s contacts with Bauer, Ashburn,
BMA, BMII, or BMIII.
ANSWER:
6
INTERROGATORY NO. 3
If you contend that this lawsuit should be dismissed for want of jurisdiction pursuant to a special
appearance by you, please identify any facts, documents, and/or witnesses that support your
contention.
ANSWER:
INTERROGATORY NO. 4
State the times, sources, and means by which you obtained possession of each of the Trade Secret
Documents, including identification of all agents, employees, or other individuals affiliated with
you who obtained or viewed such Trade Secret Documents.
ANSWER:
INTERROGATORY NO. 5
State the times, sources, and means by which you conveyed to any other person any Trade Secret
Document, or any Trade Secret Information.
ANSWER:
IV.
REQUESTS FOR PRODUCTION
REQUEST FOR PRODUCTION NO. 1
Produce any Trade Secret Documents still in your possession.
RESPONSE:
REQUEST FOR PRODUCTION NO. 2
Produce any and all documents that relate to the formation of BMIII, including, but not limited to,
discussions of potential members, employees, agents, office locations, and business to be
conducted by BMIII.
RESPONSE:
7
REQUEST FOR PRODUCTION NO. 3
Produce all communications received from or sent to any person or location in Texas relating to
the formation of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 4
Produce all communications received from or sent to any person or location in Texas relating to
the business activities or prospective business activities of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 5
Produce all communications received from or sent to any person or location in Texas relating to
the leasing activities or prospective leasing activities of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 6
Produce all communications received from or sent to any person or location in Texas relating to
Antero’s leasing, production, operations, plans, or business in West Virginia.
RESPONSE:
REQUEST FOR PRODUCTION NO. 7
Produce all communications received from or sent to any person or location in Texas relating to
EnerQuest’s investment or potential investment in the ownership or leasing of any oil and gas
interests located in units operated, to be operated, drilled, or to be drilled by Antero.
RESPONSE:
REQUEST FOR PRODUCTION NO. 8
Produce any and all communications with Robert Scott Bauer.
RESPONSE:
8
REQUEST FOR PRODUCTION NO. 9
Produce any and all communications with John Bradley Ashburn.
RESPONSE:
REQUEST FOR PRODUCTION NO. 10
Produce any and all communications with Austin Fox, Kelly O’Connor, or any other person
employed by Texhoma Land Consultants I Inc.
RESPONSE:
REQUEST FOR PRODUCTION NO. 11
Produce all documents relating to payments made by EnerQuest to any person or entity located in
Texas or organized under the laws of the State of Texas for the purpose of acquiring or leasing oil
and gas interests located in units operated, to be operated, drilled, or to be drilled by Antero
(regardless of what entity would hold those minerals or leases).
RESPONSE:
REQUEST FOR PRODUCTION NO. 12
Produce all documents relating to BMIII’s sale of West Virginia oil and gas properties.
RESPONSE:
REQUEST FOR PRODUCTION NO. 13
Produce all documents relating to EnerQuest’s awareness of, management of, or participation in
BMIII’s sale of West Virginia oil and gas properties.
RESPONSE:
REQUEST FOR PRODUCTION NO. 14
Produce all communications with BMA.
RESPONSE:
9
REQUEST FOR PRODUCTION NO. 15
Produce all documents you transmitted to or received from BMA.
RESPONSE:
REQUEST FOR PRODUCTION NO. 16
Produce all documents in your possession, custody, or control relating to Texhoma Land
Consultants I Inc.
RESPONSE:
REQUEST FOR PRODUCTION NO. 17
Produce all documents in your possession, custody, or control transmitted to or received from
Texhoma Land Consultants I Inc.
RESPONSE:
REQUEST FOR PRODUCTION NO. 18
Produce any and all documents related to the locations and/or residences of all members, directors,
officers, employees, and agents of EnerQuest.
RESPONSE:
REQUEST FOR PRODUCTION NO. 19
Produce any and all documents related to the locations and/or residences of all members, directors,
officers, employees, and agents of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 20
Produce any and all documents that relate to any offices owned, maintained, or used, in the State
of Texas, by or on behalf of EnerQuest.
RESPONSE:
10
REQUEST FOR PRODUCTION NO. 21
Produce any and all documents that relate to any offices owned, maintained, or used, in the State
of Texas, by or on behalf of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 22
Produce any and all documents that relate to business conducted in the State of Texas by or on
behalf of EnerQuest, including, but not limited to, contacts with Bauer, Ashburn, BMA, or BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 23
Produce any and all documents that relate to business conducted in the State of Texas by or on
behalf of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 24
Produce any and all documents that relate to records or documents, owned or maintained by or on
behalf of EnerQuest that are located in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 25
Produce any and all documents that relate to records or documents, owned or maintained by or on
behalf of BMIII that are located in the State of Texas
RESPONSE:
REQUEST FOR PRODUCTION NO. 26
Produce documents sufficient to identify all property owned in the State of Texas by or on behalf
of EnerQuest, including any oil and gas wells operated by EnerQuest.
RESPONSE:
11
REQUEST FOR PRODUCTION NO. 27
Produce documents sufficient to identify all property owned in the State of Texas by or on behalf
of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 28
Produce any and all documents that relate to bank accounts maintained in the State of Texas by or
on behalf of EnerQuest.
RESPONSE:
REQUEST FOR PRODUCTION NO. 29
Produce any and all documents that relate to bank accounts maintained in the State of Texas by or
on behalf of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 30
Produce any and all documents that relate to mailing addresses or telephone numbers maintained
in the State of Texas by or on behalf of EnerQuest.
RESPONSE:
REQUEST FOR PRODUCTION NO. 31
Produce any and all documents that relate to mailing addresses or telephone numbers maintained
in the State of Texas by or on behalf of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 32
Produce any and all documents that relate to agents for service of process maintained in the State
of Texas by or on behalf of EnerQuest.
RESPONSE:
12
REQUEST FOR PRODUCTION NO. 33
Produce any and all documents that relate to agents for service of process maintained in the State
of Texas by or on behalf of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 34
Produce any and all documents that relate to any correspondence, e-mails, or phone calls to or
from a person located in the State of Texas by or on behalf of EnerQuest.
RESPONSE:
REQUEST FOR PRODUCTION NO. 35
Produce any and all documents that relate to trips by or on behalf of EnerQuest to the State of
Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 36
Produce any and all documents that relate to meetings conducted by or on behalf of EnerQuest in
the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 37
Produce any and all documents that relate to meetings conducted by or on behalf of BMIII in the
State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 38
Produce any and all documents that relate to the purchase or sale of any goods or services by or
on behalf of EnerQuest in the State of Texas.
RESPONSE:
13
REQUEST FOR PRODUCTION NO. 39
Produce any and all documents that relate to the purchase or sale of any goods or services by or
on behalf of BMIII in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 40
Produce any and all documents that relate to advertisements or marketing done by or on behalf of
EnerQuest in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 41
Produce any and all documents that relate to advertisements or marketing done by or on behalf of
BMIII in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 42
Produce any and all documents that relate to the solicitation of business or employees conducted
by or on behalf of EnerQuest in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 43
Produce any and all documents that relate to the solicitation of business or employees conducted
by or on behalf of BMIII in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 44
Produce any and all documents that relate to any contracts entered into by or on behalf of
EnerQuest with any resident of or Person located in the State of Texas.
RESPONSE:
14
REQUEST FOR PRODUCTION NO. 45
Produce any and all documents that relate to any contracts entered into by or on behalf of BMIII
with any resident of or person located in the State of Texas.
RESPONSE:
REQUEST FOR PRODUCTION NO. 46
Produce any and all documents that relate to taxes paid to any governmental entity in the State of
Texas by or on behalf of EnerQuest.
RESPONSE:
REQUEST FOR PRODUCTION NO. 47
Produce any and all documents that relate to taxes paid to any governmental entity in the State of
Texas by or on behalf of BMIII.
RESPONSE:
REQUEST FOR PRODUCTION NO. 48
Produce any and all documents that relate to lawsuits filed in the State of Texas (other than the
instant suit) in which EnerQuest is a party or named third-party.
RESPONSE:
REQUEST FOR PRODUCTION NO. 49
Produce any and all documents that relate to lawsuits filed in the State of Texas (other than the
instant suit) in which BMIII is a party or named third-party.
RESPONSE:
REQUEST FOR PRODUCTION NO. 50
If you contend that access to sources of proof will be easier if this lawsuit is tried in Oklahoma,
please produce any and all documents that support that contention.
RESPONSE:
15
REQUEST FOR PRODUCTION NO. 51
If you contend that the costs of securing the presence of willing witnesses will be lower if this
lawsuit is tried in Oklahoma, please produce any and all documents that support that contention.
RESPONSE:
REQUEST FOR PRODUCTION NO. 52
If you contend that compulsory process will be available to secure the attendance of unwilling
witnesses if this lawsuit is tried in Oklahoma, please produce any and all documents that support
that contention.
RESPONSE:
REQUEST FOR PRODUCTION NO. 53
If you contend that the administrative burden of this lawsuit on a court in Oklahoma would be less
than the burden on a court in Texas, please produce any and all documents that support that
contention.
RESPONSE:
REQUEST FOR PRODUCTION NO. 54
Produce any and all documents that Gregory W. Olson relied upon or consulted when he provided
the affidavit attached to EnerQuest’s Special Appearance.
RESPONSE:
16
Respectfully submitted,
STEPTOE & JOHNSON PLLC
By: /s/ Jason R. Grill
Jason R. Grill
State Bar No. 24002185
jason.grill@steptoe-johnson.com
W. Henry Lawrence
WV State Bar No. 2156
10001 Woodloch Forest Drive, Suite 300
The Woodlands, Texas 77380
281.203.5700
281.203.5701 (facsimile)
VINSON & ELKINS LLP
By: /s/ Phillip B. Dye
Phillip B. Dye, Jr.
State Bar No. 06311500
pdye@velaw.com
Jason M. Powers
State Bar No. 24007867
jpowers@velaw.com
Caroline C. Stewart
State Bar No. 24098477
cstewart@velaw.com
1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
713.758.2222
713.758.2346 (facsimilie)
ATTORNEYS FOR INTERVENOR
17
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has been forwarded
to all parties listed below via E-service and/or via facsimile, on this the 25th day of April, 2018:
Via E-Service: ghamm@hammfirm.com Via E-Service: apennington@phblaw.com
Gene A. Hamm, II H. Allen Pennington, Jr.
The Hamm Firm Matthew D. Germany
1333 W. McDermott, Suite 200 Pennington Hill, LLP
Allen, Texas 75013 Tindall Square – Warehouse No. 3
Attorney for Plaintiff, Penn 509 Pecan Street, Suite 101
Investment Funds, LLC and New Defendants Fort Worth, Texas
Venture Strong II, LLC and Joe F. Penn Jr. Attorneys for Defendants John Bradley
Ashburn and New Defendant Post Oak
Appalachia, LLC
Via E-Service: Via E-Service: avery@averymcdaniel.com
mhassett@tarrantbusinesslaw.com Avery McDaniel
Michael Hassett Law Office of Avery McDaniel
Jones Hassett, PC 1205 N. Main Street
440 North Center Fort Worth, Texas 76164
Arlington, Texas 76011 Attorney for Braxton Minerals II, LLC
Attorney for Defendants Michael Fisher,
Maegan Fisher and M&M Consulting
Via E-Service: Scott@braxtonenergy.com Via E-Service: awoodward@hrepc.com
R. Scott Bauer C. Andrew Woodward
8851 Camp Bowie Boulevard W Holman Robertson Eldridge
Suite 200 8226 Douglas Ave., Suite 550
Fort Worth, Texas 76116 Dallas, Texas 75225
Attorney for Braxton Acquisitions, LLC; Attorney for Kelly O’Connor
Braxton Energy, LLC and R. Scott Bauer
Via E-Service: rolandjohnson@hfblaw.com Via E-Service: joe.cox@bracewell.com
Roland K. Johnson Joseph M. Cox and Andrea D. Broyles
Harris, Finley & Bogle, PC 1445 Ross Avenue, Suite 3800
777 Main Street, Suite 1800 Dallas, Texas 75202
Fort Worth, Texas 76102 Spencer F. Smith
Attorney for Energy Corporation of America McAfee & Taft
211 N. Robinson Ave.
Oklahoma City, Oklahoma 73102.
Attorneys for EnerQuest Oil & Gas, L.L.C.
Via E-Service: jnt@turnerandallen.com Via E-Service: cd@peebleslaw.com
Jess N. Turner, III C.D. Peebles
Turner & Allen, P.C. The Peebles Law Firm
P.O. Box 930 1604 Devon Court
Graham, Texas 76450 Southlake, TX 76092
Attorney for Turn 2 Energy, LLC Attorney for Austin Fox
Via E-Service: brad@postoakroyalty.com
Brad Ashburn
100 N. Forest Park Blvd., Suite 201
Fort Worth, Texas 76102
Attorney for Braxton Minerals-Appalachia,
LLC
_/s/ Caroline C. Stewart_________________
CAROLINE C. STEWART
EXHIBIT C
141-290089-17 FILED
TARRANT COUNTY
CAUSE NO. 141-290089-17
4/26/2018 4:52 PM
THOMAS A. WILDER
DISTRICT CLERK
PENN INVESTMENT FUNDS, LLC, ) IN THE DISTRICT COURT OF
Plaintiff, )
)
ANTERO RESOURCES CORPORATION, )
Intervenor, ) TARRANT COUNTY, TEXAS
)
vs. )
)
BRAXTON ENERGY, LLC, et al., )
Defendants. ) 141ST JUDICIAL DISTRICT
NOTICE OF HEARING
Please take notice that Defendant EnerQuest Oil & Gas, L.L.C.’s Special Appearance to
Object to Personal Jurisdiction dated April 18, 2018 is set for hearing on Wednesday, May 9,
2018 at 1:30 p.m. in the 141st District Court for Tarrant County, located at 100 N. Calhoun Street,
Fort Worth, Texas 76196.
Respectfully submitted,
BRACEWELL LLP
By: /s/ Joseph M. Cox
Joseph M. Cox
State Bar No. 04950200
Joe.Cox@bracewell.com
Andrea D. Broyles
State Bar No. 24082744
Andrea.Broyles@bracewell.com
1445 Ross Avenue, Suite 3800
Dallas, Texas 75202
Telephone: (214) 468-3800
Facsimile: (800) 404-3970
- and –
Spencer F. Smith
State Bar No. 24008625
MCAFEE & TAFT A Professional Corporation
Tenth Floor, Two Leadership Square
211 N. Robinson Ave.
Oklahoma City, Oklahoma 73102-7103
spencer.smith@mcafeetaft.com
Attorneys for Defendant EnerQuest Oil & Gas, L.L.C.
#5689156
Certificate of Service
I hereby certify that on April 26, 2018, a true and correct copy of the foregoing document
was served on the following counsel of record in accordance with the Texas Rules of Civil
Procedure:
Jason R. Grill Phillip B. Dye, Jr.
W. Henry Lawrence Caroline C. Stewart
Steptoe & Johnson PLLC Vinson & Elkins LLP
10001 Woodlock Forest Drive, Suite 300 1001 Fannin Street, Suite 2500
The Woodlands, Texas 77380 Houston, Texas 77002-6760
jason.grill@steptoe-johnson.com pdye@velaw.com
hank.lawrence@stptoe-johnson.com cstewart@velaw.com
Attorneys for Intervenor Antero Resources Attorneys for Intervenor Antero Resources
Corporation Corporation
Gene A. Hamm, II H. Allen Pennington, Jr.
The Hamm Firm Matthew D. Germany
1333 W. McDermott, Suite 200 Pennington Hill, LLP
Allen, Texas 75013 Tindall Square-Warehouse No. 3
ghamm@hammfirm.com 509 Pecan Street, Suite 101
Attorney for Plaintiff Penn Investment Fort Worth, Texas 76102
Funds, LLC, Joe F. Penn Jr., and Venture apennington@phblaw.com
Strong II, LLC Attorneys for Defendant John Bradley
Ashburn and Post Oak Appalachia, LLC
Michael Hassett Avery McDaniel
Jones Hasset, PC Law Office of Avery McDaniel
440 North Center 1205 N. Main Street
Arlington, Texas 76011 Fort Worth, Texas 76164
mhasset@tarrantbusinesslaw.com avery@avrymcdaniel.com
Attorney for Defendants Michael Fisher, Attorney for Braxton Minerals II, LLC
Maegan Fisher, and M&M Consulting
R. Scott Bauer C. Andrew Woodward
8851 Camp Bowie Boulevard W Holman Robertson Eldridge
Suite 200 8226 Douglas Ave., Suite 550
Fort Worth, Texas Dallas, Texas 75225
scott@braxtonenergy.com awoodward@hrepc.com
Attorney for Braxton Acquisitions, LLC, Attorney for Kelly O’Connor
Braxton Energy LLC, and himself
Roland K. Johnson Charles W. Sartain
Harris, Finley & Bogle, P.C. Gray Reed & McGraw
777 Main Street, Suite 1800 1601 Elm Street, Suite 4600
Fort Worth, Texas 76102 Dallas, Texas 75201
rolandjohnson@hfblaw.com Attorneys for Global Oil and Gas Fields
Attorneys for Energy Corporation of
America
/s/ Joseph M. Cox
Joseph M. Cox
2
#5689156
EXHIBIT D
CAUSE NO. 141-290089-17
PENN INVESTMENT FUNDS, LLC, ) IN THE DISTRICT COURT OF
Plaintiff, )
)
ANTERO RESOURCES CORPORATION, )
Intervenor, ) TARRANT COUNTY, TEXAS
)
vs. )
)
BRAXTON ENERGY, LLC, et al., )
Defendants. ) 141ST JUDICIAL DISTRICT
DEFENDANT BRAXTON MINERALS III, LLC’S
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
Defendant Braxton Minerals III, LLC (“BMIII”) hereby files its Special Exceptions and
Original Answer to the Amended Petition in Intervention and Application for Temporary and
Permanent Injunction (“Amended Petition in Intervention”) of Intervenor Antero Resources
Corporation (“Antero”), and would respectfully show the Court as follows:
I. SPECIAL EXCEPTIONS
1. Antero’s Amended Petition in Intervention includes a variety of vague, ambiguous,
and generally stated allegations that do not meet these requirements, and wholly lacks any
allegations of wrongdoing on the part of BMIII. Pursuant to Rule 91 of the Texas Rules of Civil
Procedure, BMIII specially excepts to Antero’s claims for Trade Secret Misappropriation,
Conspiracy, and Aiding and Abetting. Texas follows the “fair notice” standard for pleading, which
looks at whether the opposing party can ascertain from the pleadings the nature and basic issues
of the controversy and what testimony will be relevant. Horizon/ CMS Healthcare Corp. v. Auld,
34 S.W.3d 887, 896 (Tex. 2000). If a plaintiff pleads a cause of action in general terms, the
defendant may file special exceptions to require the plaintiff to plead specifically. See Subia v.
Tex. Dept. of Human Servs., 750 S.W.2d 827, 829 (Tex. App.—El Paso 1988, no writ).
DEFENDANT BRAXTON MINERALS III, LLC’S Page 1
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
2. In the Amended Petition in Intervention, Antero has failed to identify any wrongful
conduct by BMIII that injured Antero or caused Antero to incur damages. In fact, BMIII is only
mentioned in eight (8) paragraphs throughout the Amended Petition in Intervention, related to the
following subject matters: (a) Robert Scott Bauer identified certain Antero Title Opinions in his
possession or that were obtained from John Bradley Ashburn, and those title opinions related to
mineral properties acquired by BMIII; (b) BMIII’s membership structure and the current dispute
between the members related to management of the company; and (c) EnerQuest Oil and Gas,
LLC has advertised BMIII’s assets for sale. See Amended Petition in Intervention ¶¶ 38, 40, 42–
46, 62. Absent from the Amended Petition in Intervention is any alleged wrongful conduct by
BMIII; instead, Antero has alleged conduct of third parties or information completely irrelevant to
the elements of any of Antero’s causes of action. As a result of Antero’s vague, ambiguous, and
general pleading, BMIII cannot ascertain from the Amended Petition in Intervention which causes
of action Antero is pursuing against BMIII, or even what conduct of BMIII Antero alleges is
wrongful. Accordingly, Antero should be required to re-plead and provide sufficient information
to give BMIII “fair notice” of the causes of action asserted.
II. GENERAL DENIAL
3. Pursuant to Rule 92 of the Texas Rules of Civil Procedure, BMIII denies each and
every allegation in Antero’s Amended Petition in Intervention and demands strict proof thereof by
a preponderance of the evidence.
III. AFFIRMATIVE DEFENSES
4. Antero’s claims are barred, in whole or in part, due to the failure to state a claim
upon which relief may be granted.
5. Antero’s claims are barred, in whole or in part, by virtue of the doctrine of waiver.
DEFENDANT BRAXTON MINERALS III, LLC’S Page 2
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
6. Antero’s claims are barred, in whole or in part, by virtue of the doctrine of estoppel.
7. Antero’s claims are barred, in whole or in part, by virtue of the statute of limitations
doctrine.
IV. REQUEST FOR DISCLOSURE
8. Pursuant to Rule 194 of the Texas Rules of Civil Procedure, BMIII requests that
Antero disclose, within thirty (30) days of service of this request, the information or material
described in Rule 194.2.
V. PRAYER
WHEREFORE, PREMISES CONSIDERED, Defendant BMIII respectfully requests that
the Court sustain its special exceptions to Antero’s Amended Petition in Intervention. Specifically,
BMIII requests that the Court require Antero to re-plead its claims against BMIII. BMIII further
requests that Antero take nothing by its claims, and BMIII recover the costs of this proceeding,
and such other and further relief to which it may be justly entitled.
Respectfully submitted,
BRACEWELL LLP
By: /s/ Joseph M. Cox
Joseph M. Cox
State Bar No. 04950200
Joe.Cox@bracewell.com
Andrea D. Broyles
State Bar No. 24082744
Andrea.Broyles@bracewell.com
1445 Ross Avenue, Suite 3800
Dallas, Texas 75202
Telephone: (214) 468-3800
Facsimile: (800) 404-3970
Attorneys for Defendant Braxton Minerals III,
LLC
DEFENDANT BRAXTON MINERALS III, LLC’S Page 3
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
CERTIFICATE OF SERVICE
I hereby certify that on April 30, 2018, a true and correct copy of the foregoing document
was served on all counsel of record in accordance with the Texas Rules of Civil Procedure.
/s/ Joseph M. Cox
Joseph M. Cox
DEFENDANT BRAXTON MINERALS III, LLC’S Page 4
SPECIAL EXCEPTIONS AND ORIGINAL ANSWER
#5692762
EXHIBIT E
EXHIBIT F
Powers, Jason
From: Cox, Joe
Sent: Tuesday, May 22, 2018 3:28 PM
To: Jason Grill; Powers, Jason
Cc: Broyles, Andrea; Cox, Joe
Subject: [EXT] Special appearance and discovery to EnerQuest
Dear Jason and Jason:
We are going to appeal the denial of the special appearance for EnerQuest. We were hoping not to have to seek relief
from the 2nd Court of Appeals for a motion to stay discovery. Would you all agree to stay the discovery as to only
EnerQuest? We intend to answer the discovery for BMIII and continue to participate in the discovery of the case, as well
as produce any documents EnerQuest has in relation to BMIII, Bauer and Ashburn through BMIII. Please let us know
today if you could agree to this. We would agree to answer the EnerQuest discovery within 30 days of a ruling from the
Court of Appeals upholding the denial of the special appearance.
Also, in the hustle and bustle of the deposition’s ending, I inadvertently took 4 pages from the two boxes in the other
conference room that I intended to mark and question Bauer about. Please let Andrea know where to send the few
pages I took.
Thanks for the hospitality.
Best regards.
Joe
______
JOSEPH M. COX
Partner
joe.cox@bracewell.com
T: +1.214.758.1077 | F: +1.800.404.3970 | M: +1.214.505.7000
BRACEWELL LLP
1445 Ross Avenue Suite 3800 | Dallas, TX | 75202-2724
bracewell.com | profile | download v-card
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