WICHITA, Kan., Feb. 22, 2016 /PRNewswire/ -- Strategic Energy Income Fund III LP ("SEIF"), an affiliate of U.S. Energy Development Corporation, and more importantly, on behalf of an investment program for the benefit of hundreds of smaller retail investors, recently filed a lawsuit against Stephens Energy Group, LLC (affiliate; Stephens Production Company), Slawson Exploration Company, Inc. ("Slawson"), Alameda Oilfield Services Trust ) ("Alameda"), and MBI Oil and Gas, LLC ("MBI"). The lawsuit alleges conspiracy, fraud, racketeering, breach of contract, tortious interference, and breach of fiduciary duty, among other counts, and seeks punitive damages as well as actual damages.
In the summer of 2014, Stephens desired to obtain acreage, producing wells, and pipeline rights in Oklahoma. To do so, Stephens entered into an agreement to purchase Slawson's acreage position in the area which is subject to a three part joint operating agreement. The pipeline servicing those leases was owned by MBI, Alameda, and SEIF. Stephens also entered into an agreement with MBI and Alameda to attempt to purchase their interest in that pipeline, however SEIF, on behalf of its investors, exercised its contractual right of first refusal to purchase this interest itself on the same terms and conditions.
According to the lawsuit, SEIF learned on September 17, 2014, the day before it was supposed to close on this interest, that Stephens and Slawson had collaborated to cancel at least one material contract to the pipeline which was an agreement dedicating the production from this acreage to the pipeline. SEIF, on behalf of its investors, alleges this action was taken intentionally to diminish the value of the pipeline in an effort to prevent SEIF from closing on the purchase.
In September of 2015, Alameda and MBI sold their interests in the pipeline to Stephens and the acreage dedication agreement was replaced and executed on the same day of the closing of this transaction. Despite language in the pipeline agreement requiring it, no party sought SEIF's consent to sell to Stephens, nor did they ever indicate this sale was moving forward until after it had closed. Slawson, Alameda and MBI have also returned the $500,000 investor deposit when SEIF exercised its right of first refusal.
SOURCE U.S. Energy Development Corporation