A federal court jury has found for Coastal Corp.'s ANR Pipeline Co. in a gas take or pay case brought by Dyco Petroleum Corp., Tulsa.
Dyco, which sought more than $200 million in damages from the Coastal subsidiary, plans to appeal the jury verdict handed down in district court in Tulsa in mid-February.
The jury found that ANR was in a condition of force majeure and performance under the take or pay clauses in its wellhead gas purchase contracts with Dyco had become commercially impracticable.
ANR declared force majeure June 1, 1985.
The jury ruled ANR liable to Dyco for payments before that date.
ARGUMENT, APPEAL
Michael Beatty, ANR attorney, argued that contract language permitted ANR to stop taking gas from about 40 Dyco wells in the Anadarko basin after Michigan Consolidated Gas Co. canceled its purchase contract with ANR under Federal Energy Regulatory Commission Order 380.
Robert Pezold, attorney for Dyco, said the decision conflicts with rulings by the Oklahoma Supreme Court in Golsen vs. ONG Western Inc. and the 10th Circuit Court of Appeals in Kaiser-Francis Oil Co. vs. Producers Gas Co.
Appeal of the ANR-Dyco case would be to those courts. But that won't happen until the Tulsa court determines damages in a second phase of the case, which is to begin in March or April.
The judge allowed the jury to be shown what it would have cost ANR to take or pay for gas under all contracts with producers if it had been required to perform under Dyco's.
The judge did not allow introduction of evidence on the ratemaking process, ANR's size and profitability, or ability to pay producers and recover costs from its customers.
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