Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-05827/USCOURTS-caed-1_04-cv-05827-1/pdf.json

Parties Involved:
Anadarko Petroleum Corporation
Plaintiff
Hilton Petroleum, Inc
Defendant
KOB Energy, Inc
Defendant
STB Energy, Inc
Defendant

Document Text:

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

1

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

ANADARKO PETROLEUM )

CORPORATION, )

)

)

)

Plaintiff, )

)

vs. )

)

)

HILTON PETROLEUM, INC., )

et al., )

)

)

Defendant. )

)

)

No. CV-F-04-5827 REC/DLB

ORDER DISMISSING ACTION

AGAINST STB ENERGY, INC.; 

GRANTING PLAINTIFF'S MOTION

FOR DEFAULT JUDGMENT AGAINST

DEFENDANTS HILTON PETROLEUM,

INC. AND KOB ENERGY, INC.;

AND DIRECTING CLERK TO ENTER

JUDGMENT FOR PLAINTIFF

On November 7, 2005, the court heard plaintiff Anadarko

Petroleum Corporation's motion for default judgment against

defendants Hilton Petroleum, Inc. and KOB Energy, Inc. No

written responses and no appearances were made on behalf of

Hilton or KOB. Following oral argument, the court ordered

Anadarko to file a supplemental declaration, which declaration

has been filed as ordered.

On June 14, 2004, Anadarko, a Delaware corporation, filed a

Complaint for Breach of Contract and Declaratory Relief against

Case 1:04-cv-05827-REC-DLB Document 19 Filed 11/17/05 Page 1 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

2

Hilton, alleged to be a Nevada corporation; KOB., alleged to be a

Colorado corporation; and STB Energy, Inc., alleged to be a Texas

corporation.

Service of process has not been effected on STB Energy, Inc. 

According to the Joint Scheduling Report filed by Anadarko on

September 14, 2005, Anadarko attempted to serve STB Energy, Inc.

at its places of business in Bakersfield, California; Chatham,

New Jersey; Bridgeport, Texas; Tulsa, Oklahoma; and Oklahoma

City, Oklahoma, only to learn that STB Energy, Inc. no longer

resides at those locations. Anadarko then began the process of

serving STB Energy, Inc. at its headquarters in Vancouver,

British Columbia, Canada, which process was then on-going. To

date, no service of process has been made on STB Energy, Inc. At

oral argument on November 7, 2005, Anadarko advised the court

that this action should be dismissed as against STB Energy, Inc.

On June 17, 2004, Anadarko served the summons and Complaint

on Hilton and KOB by personally serving Monica Maser, Paracorp

Incorporated, in Sacramento as the person authorized to accept

service of process. Neither Hilton or KOB filed an answer or

otherwise appeared in this action. In addition, Anadarko

represented that an attorney, Craig Stoner, contacted counsel for

Anadarko and indicated that the defendants would not answer the

Complaint. 

Default was entered against Hilton and KOB by the Clerk on

September 15, 2004. 

Anadarko now moves the court for default judgment against

Case 1:04-cv-05827-REC-DLB Document 19 Filed 11/17/05 Page 2 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Anadarko filed a supplemental declaration on September 23, 1

2005 in which Anadarko’s attorney, Mr. Sweeney, avers that he

served a copy of the motion for default judgment on Hilton and KOB

on September 15, 2005 at the address to which the summons and

Complaint were served, that the copies were returned with a

printout from the California Secretary of State business portal

website indicating that the registered agent for service of process

for Hilton is now located in Vancouver, British Columbia, that

counsel then served a copy of the motion for default judgment on

Hilton by mail to the address for service of process in Vancouver

on September 21, 2005, that counsel conducted a search on the

California Secretary of State business portal website to determine

if there had been a change in KOB’s registered agent for service of

process since service of the summons and Complaint, that the search

revealed that the agent for service of process for KOB is the same

as for Hilton and is located in Vancouver, and that service of the

motion for default judgment was served on that agent on September

21, 2005.

3

Hilton and KOB.1

If a default has been entered against a defendant, the

factual allegations of the complaint, except those relating to

the amount of damages, are taken as true. Wright, Miller & Kane,

10A Federal Practice and Procedure, § 2688, pp. 58-59 (1998). 

However, liability is not deemed established simply because of

the default and the court, in its discretion, may require some

proof of the facts that must be established in order to determine

liability. Id. at 60-61. If the damages are not certain or

capable of easy computation, the court may hold whatever hearing

or inquiry it deems necessary. Id. at 64.

According to the allegations of the Complaint, the

Declaration of Alan Fitzgerald, and the Declaration of James J.

O’Malley in support of the motion for default judgment, 

defendant STB and several other entities entered into an

agreement on January 30, 1998 to explore hydrocarbons in certain

Case 1:04-cv-05827-REC-DLB Document 19 Filed 11/17/05 Page 3 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

4

San Joaquin Basin Lands, which agreement is referred to as the

East Lost Hills Exploration Agreement (hereinafter referred to as

the Agreement). Pursuant to the terms of the Agreement, the

operator of the exploration for hydrocarbons was to be Bellevue

Resources, Inc. However, Bellevue Resources, Inc. resigned its

position as operator effective July 1, 1999 and was replaced by 

Berkley Petroleum Corp. In March, 2001, Anadarko subsequently

acquired the stock of Berkley Petroleum Corp. and took over

Berkley’s role as operator under the Agreement. Pursuant to the

Agreement, the operator was to drill an initial test well,

Bellevue #1-17. If oil or gas in commercial quantities was

discovered, additional wells were contemplated. The development

and operation of additional wells was governed by the Joint

Operating Agreement, identified as Exhibit G to the Agreement. 

Hilton and KOB subsequently acquired working interests in the

East Lost Hills exploration and were bound by the Joint Operating

Agreement. In May, 1998, Bellevue #1-17 discovered commercial

gas. Therefore, the Joint Operating Agreement took effect and

the development of nine additional wells, ELH #1 through ELH #9,

began. Under the terms of the Joint Operating Agreement, the

non-operators were obligated to pay the operator for costs

associated with drilling, development and operation of the wells

known as ELH #1 through ELH # 9. As detailed in the Joint

Operating Agreement, STB, KOB and Hilton were obligated to pay

Anadarko for the following costs:

(a) ecological and environmental costs

Case 1:04-cv-05827-REC-DLB Document 19 Filed 11/17/05 Page 4 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

5

associated with satisfying regulatory or

environmental considerations.

(b) lease rentals and royalties.

(c) labor costs, including employee benefits.

(d) materials, including transportation

costs.

(e) contract services, equipment, and

utilities provided by third parties.

(f) equipment and facilities furnished by the

operator.

(g) damages and losses necessary for the

repair or replacement of property.

(h) legal expenses.

(i) taxes.

(j) insurance.

(k) abandonment and reclamation.

(l) communications.

(m) other expenditures that were necessary

and proper in the development and operation

of the wells. 

The Complaint alleges that Hilton and KOB have failed to make all

of the payments required under the Joint Operating Agreement. 

Fitzgerald, a certified public accountant and Supervisor, Joint

Interest Accounting for Anadarko, avers that he is responsible

for calculating and tracking all monies due by parties pursuant

to the terms of the Joint Operating Agreement, that Hilton and

KOB, among others, have failed to make all of the payments

required under the Joint Operating Agreement, and that the monies

owed by Hilton and KOB have been calculated and determined

Case 1:04-cv-05827-REC-DLB Document 19 Filed 11/17/05 Page 5 of 6
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

6

according to the Council of Petroleum Accountants Societies

(COPAS). Fitzgerald’s declaration and the exhibits attached

thereto establish to the court’s satisfaction that Hilton is

liable to Anadarko for a sum total of $115,057.20 and that KOB is

liable to Anadarko for a sum total of $852,680.67.

ACCORDINGLY:

1. This action is dismissed against defendant STB Energy,

Inc.;

2. Anadarko Petroleum Corporation’s motion for default

judgment against defendants Hilton Petroleum, Inc. and KOB

Energy, Inc. is granted. 

3. Hilton Petroleum, Inc. is liable to Anadarko Petroleum

Corporation in the amount of $115,057.20;

4. KOB Energy, Inc. is liable to Anadarko Petroleum

Corporation in the amount of $852,680.67; and 

5. The Clerk of the Court is directed to enter judgment for

Anadarko Petroleum Corporation.

IT IS SO ORDERED.

Dated: November 15, 2005 /s/ Robert E. Coyle 

668554 UNITED STATES DISTRICT JUDGE

Case 1:04-cv-05827-REC-DLB Document 19 Filed 11/17/05 Page 6 of 6