Replies to post #8147 on Mesa Offshore Trust (fka MOSH)

[shisya]

Mine is not a very educated answer, but I am guessing, PXD could say that they didnt farmout their property because they had the means and $$ to pay for whatever needed to be done on their side, however they farmed out MOSH side cause MOSH was not able to pay the $$$.

[GO MOSH]

PXD was supposed to front (loan) the costs for the trust if they were the operator like Boone/Mesa had always done (reference the early/mid 990's SEC filings showing Mesa fronting over $12 million for a 5 well drilling program on the trust's S. Marsh Island 155 block). pxd violated that requirement on both the Brazos A-7 Figi and the Samoa dry hole deep shelf discovery prospects. So, pxd didn't expect to get sued for an illegal farmout on Midway. Woodside knew better, but deferred to pxd, because the potential huge return blinded them.

JPM didn't even inspect the farmout documents at the time, and didn't get a copy until after the lawsuit was filed. Some of the other old moshers were constantly on our trustee's case about rubber stamping anything put before them (reference the Wiegand group letter filed 2/26/07 for copies of emails to jpm, pxd and the SEC, in attempts to find anyone who might listen to the injustices thrown at our trust).

All 3 of the defendants have worked hard to be sued for mega bucks; they deserve it; and nobody should deprive them of it. I'd just like this case to go before a jury, so that they would also get the notoriety usually accorded to common thieves.

[interested_observer_]

Instructmba - MOSH farmout -

To answer your question, PXD owned 50% out right and then also managed MOSH's 50%. When they went to drill, since each had a working interest (WI), each side needed to fund the drilling. MOSH did not have the money. Rather than fronting the funds like what was done in the past, PXD farmed out MOSH's WI to Woodside, and MOSH received 4.8% in an overriding royalty. However PXD was the operator, and I believe in the view of the lawsuit, causes it to be an illegal farmout under the trust articles since it requires all farmouts to be to third party arms length agreement. The farmout to Stone on WD is an example - PXD was not involved. However on Midway, PXD was involved as operator thru their 50% WI. The other question in my mind was ORR's are usually in 1/8 or 12.5%. 1/2 of 12.5% is 6.25% and our ORR is 4.8%, so it looks like we came up short. If I am missing something, I don't see how I figured wrong.

Hopefully that explains it.
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... just my view - no more, no less