Winston Dallas Team Secures Significant Settlement for Scout Energy Group

Winston & Strawn successfully represented Scout Energy Group II, LP (Scout) in a lawsuit brought by Badger Midstream Energy, LP (Badger) in the 157th Judicial District Court of Harris County, Texas. The lawsuit was filed by Badger in January of 2017, and centered around a Gas Gathering and Processing Contract that Badger alleged Scout was breaching. More specifically, Badger alleged that Scout was not entitled to retain condensate that fell out of the natural gas stream in Scout’s gas gathering system even though the contract had been interpreted and understood by multiple parties to allow for this to occur for almost 10 years. 

In the lawsuit, Badger sought up to $100 million dollars in damages from Scout. Just prior to trial, the Court granted Scout’s motion for summary judgment on future damages, leaving only $19.6 million in potential damages at issue for trial. Trial began on July 23, 2018. After one week of trial, the parties settled with Scout buying Badger’s processing plant and related assets for $15 million, and Scout valuing Badger’s damages claim at zero dollars. As part of the settlement, Badger dismissed and released all claims against Scout and assigned the Gas Gathering and Purchasing Contract to Scout.

Scout was represented by Dallas Partners Tom Melsheimer and Tom Walsh.