Litigation and Dispute Resolution – Processing Cost Allowances on NGL Royalties

Provided litigation and dispute resolution support on behalf of twelve major independent gas producing companies in Federal Qui Tam litigation.  Responded to Relator’s claims to exclude recompression costs from the processing cost allowances allowed by the Mineral Management Service (MMS).  Reviewed the design and operation of numerous gas plants, and demonstrated that recompression is integral to the cryogenic turbo-expander process and its associated costs were fully deductible.

Refinery and Pipeline Construction Arbitration

Analyzed numerous construction and design defect issues on behalf of an engineering, procurement and construction (EPC) contractor involved in a lump-sum $1.6 billion dollar refinery and pipeline project in Mexico.  Assessed additional work order and defect claims for new crude oil, product pipeline, and pump station construction in reference to contractual requirements and normal industry practice.  Prepared expert reports including quantum analysis detailing the basis of opinions and findings and testified in International Chamber of Commerce (ICC) arbitration hearings.

Refinery Property Damage & Business Interruption Claim Review

On behalf of mechanical service firm, evaluated a BI and PD claim made by a refining company against the firm who provided inspection services at a refinery.  Analyzed the refinery operating data and information to evaluate claims that the actions by the service firm caused an emergency shutdown of several refinery process units and more than $100 million in losses.

Review of Plant Operations and Maintenance History

Evaluated historical operating and maintenance practices that impacted maintenance and inspection work schedules during an extended refinery downtime.  Prepared expert report and provided deposition testimony.

SJ Basin Coal Bed Methane Gas Royalty Dispute

Conducted independent evaluation and provided expert opinions on behalf of large CBM gas producer in San Juan Basin in response to underpayment claims made by royalty owners.   Analyzed use and purposes of gas quality specifications in wellhead purchase and gathering/transportation contracts, quality and composition of production in the basin, usability and consumption of gas prior to treatment or processing, and common practices of producers and midstream companies.  Prepared expert report and deposition testimony.

Gas Plant Construction Dispute

On behalf of mechanical subcontractor, provided expert opinions as to claims and counterclaims against contractor related to construction of new gas processing plant in South Texas.  Claims involved contract not-to-exceed provision as well as cost overruns and delays associated with late engineering,  unexpected site conditions, late delivery of materials, scope changes, quantity growth, and rework.  Prepared expert report with case settling before proceeding to trial.

Gas Processing Plant Dispute

Prepared expert reports and testified in Australian arbitration on behalf of Engineering, Procurement and Construction (EPC) contractor involved in engineering and construction of offshore platform, sub-sea pipelines, and onshore gas processing plant.  Issues involved impact of change to feedstock design basis as well as numerous engineering and construction related defect claims made by owner.

Combined Cycle Cogeneration Plant Valuation

Completed an income analysis for a large natural gas combined cycle cogeneration power plant in Texas, and assisted licensed appraiser in preparing a market value report in support of property tax litigation.  Income analyses covered multiple tax years and considered different operating scenarios as part of highest and best use assessment.  Also assisted in cost approach and functional obsolescence determination.  Provided deposition testimony in support of work.

Crude Oil Royalty Dispute

Determined economic damages due over riding royalty owner in offshore OCS leases who had a “same as Fed” payment provision.  Evaluated reported oil and gas product volumes, product pricing, federal allowable transportation and processing deductions, and late payment interest.  Prepared expert report on calculated damages over the disputed period.

Crude Oil Pipeline Construction

Provided expert reports and deposition testimony on behalf of a crude oil pipeline construction contractor in support of breach of contract claims made by the owner.  Conducted an evaluation of contractor performance under a reimbursable, target price contract including impact of right-of-way delays, scope changes, and weather delays.

Gas Plant Explosion and Fire

Conducted incident investigation at gas processing plant in North Dakota involving fire during tanker truck loading.  Truck driver claimed design and safety deficiencies at facility resulted in tank overflow and fire.  Prepared expert report responding to claims.  Case settled prior to trial.

Petroleum Product Pipeline Failures

Reviewed operation, maintenance, and inspection procedures and relevant history for refined products pipeline which suffered failures and subsequent release of their contents and resulted in litigation.

Environmental Contamination From Former Refinery Site

Evaluated historical operating and maintenance practices that led to ground and groundwater contamination at refinery site in Illinois with emphasis on developing a range of possible types of wastes and quantities of waste generated during the six decade operating lifetime of the refinery.  Provided expert report and testimony.

Utility Plant Dispute

Acted as technical expert in Engineering, Procurement and Construction (EPC) contract dispute in International Chamber of Commerce (ICC) Arbitration over claims made by owner against contractor related to the design and construction of utility plant facilities supporting large refinery complex.  Claims involved the design of asphalt fired steam boilers, a seawater desalination unit, seawater piping, corrosion, and other plant design issues.  Conducted several site investigations, prepared expert reports, and testified before ICC Arbitration panel.

Refinery and Chemical Plant Inter-Plant Contract Dispute

Assessed the financial magnitude and contract basis for claim of incorrect pricing of feedstocks transfers between an adjacent refinery and chemical plant.  Provided expert testimony.

Refinery Ad Valorem Valuations

Prepared fair market values of many refineries for owners and tax assessors for ad valorem property tax purposes in California, Illinois, Louisiana, Oklahoma and Texas.  Prepared reports on fair market values using the three standard approaches to value of cost, sales and income, and provided testimony in litigation.

Watson Millican & Company provides litigation support to attorneys and industry participants through expert analysis and expert witness testimony.  Our extensive industry and consulting experience provides our clients with a comprehensive and deep knowledge base that can be applied to a variety of dispute, arbitration, and litigation matters.

By having management, engineering, and finance positions within the energy industry, our consultants bring considerable experience to assignments and can provide objective assessments of both technical and commercial issues.  We have provided consulting as well as expert witness services to clients involving construction disputes, breach of contract claims, oil and gas royalty cases, insurance claims, property tax valuations and incident investigations.  Our consultants have extensive testimony experience in State and Federal courts as well as international arbitration settings.  We have a proven record of successful outcomes for our clients on a variety of complex issues.