Yesterday's Hearing in Houston was about the Conditional Settlement Agreement between JPM and the Trust, the resignation of the old Trustee (JPM), and the installation of the new Trustee (Easley).
PXD argued that the JPM CSA and dollars being offered was a "Mary Carter" arrangement that could not be effectuated because it paid blood money to a select few while ignoring the other unit holders. OK. The Judge has options here. Lots of options. I suspect (because I don't have all the intel back) is that she is going to modify the CSA slightly over the weekend to wire around the Carter issue thus removing grounds for any appeal. Then she'll install Easley as a matter of equity next week. Someone has to be Trustee and he's the only guy we could find who was qualified with the exception of the $100 million net worth requirement. According to deposition excerpts, the old Trustee identified one bank willing to step. That was Wells Fargo, however, the litigation scared them off. Ulrich stated that he had no problem with Easley and actually recommended him for the job. When Easley takes over, it's game on for PXD. He could and should light a bonfire under their ass and demand forensic accounting and the return of monies they've been stealing all along. Several post-Katrina wells are on line or coming back on line so cash flow begins again shortly (Q1). The problem is that PXD is the MGP and they control the cash. Hmmm. What to do? Our mission is to oust PXD ASAP and find a new MGP. I've suggested modifying the production agreements to make it super fair for the MGP in order to incentivize future drilling activities because we o have some leases that are productive. As I learn more I'll post more. Hope this helps.
