Unfortunately for woodside, they saw an opportunity as presented to them by the morons at pxd. woodside formulated a business plan that had them becoming a "major player" in the gom. in order to do that, they either had to pony up their own resources and get after it or partner up and leverage the resources of someone who (they hoped) knew what they were doing. you see drilling offshore is quite a bit different from doing it on shore. logistics and techniques primarily. and woodside was a long way from home so it made sense to p up.
pxd was sitting on all these leases that needed to be drilled but they didn't want to make a solo run so they wiggled a worm in front of woodside who bit. keep in mind that woodside is owned (34%) by shell. guess what shell drilled next door to the midway? a monster on the a-23 that is projected to produce enough nattie gas to power half the free world. if that didn't get them hot and bothered nothing could.
anyhoo - pxd and woodside saddled up and started drilling based on an illegal farmout. i'm not going into the details because it would take too much time. let's just say that either someone failed to perform adequate due diligence OR someone wrongfully believed / presumed that the mosh trust was already legally dead and thus the green light to proceed was lit.
ok - so they drilled and they found what they were looking for. woodside announces the discovery. oops. guess what? the trust ain't quite dead because someone has been converting funds belonging to the trust for their own use and someone else questioned the false accounting. i mean, how can the mgp charge operating expenses to an ORRI? you can't. it's not a legitimate charge. it's a ruse. further, how can you drill on a lease that someone else owns and not cut them in on the payout action? you can't. it doesn't work that way. you wanna play? you gots to pay. too many thinks came up stinky and the playas got themselves sued as a result. and yes, virginia, when their is a legit target to shoot at, you take it by naming any and all who may have their hand in the wrong jar.
and don't fool yourself. woodside had access to any document they needed to make an informed decision. would you toss $55 million at various gom drilling projects without all the info? i seriously doubt it.
now, if two parties are in conspiracy to steal something that belongs to someone else and one party gets involved based on the misrepresentations of the other (or not) they are BOTH remain liable for damages.
it's kinda like driving your car and you pick up a hitchhiker who is in possession of illegal drugs. you get stopped and hitchy slips the dope under a seat cushion. guess who else is in hot water, pal? yup, you. even though you might or might not have had actual knowledge your new buddy was holding dope. hey - it was in YOUR car.
in this case, woodside made a big deal out of the discovery. they knew about the dope and they thought they were in the clear. smacks of conspiracy to me.
what's their level of culpability? not really sure. i don't think it's quite as bad as that of pxd and my gut tells me they got duped and relied on bad info. we'll see. my bet is that want a large chunk of pxd's hindquarters about now.
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