steve graves resigns, page-38

Hi there Nathanblack,

lol, your statement "Now Frank and Steve need to register a new company and purchase these assets from GGP possibly with an AKW style indemnity clause. Then turn the taps on and let the oil flow." reminds me of an actual true story which took place in Texas not that long ago. Pretty strong statement NB but anyway, here is the story which fits your post.Just to make it crystal clear !This has no reflection on what is happening here of course ! Just a story for ones amusement.

It is actually an excellent read and only one page. The technical side of the story amazes me e.g.; oil has it's own fingerprint/DNA and it can be tracked to it's origin. Not much one can get away with is there now ?

http://www.tdcaa.com/node/4814



Investigation

In September 2007, I received a visit from Texas Ranger Dick Johnson and Railroad Commission employee Nick Nichols. Nichols and Johnson were initiating an investigation into oil field theft in Hardeman and Wilbarger Counties and were looking for guidance on how to proceed.

The Railroad Commission had received information from an oil field worker that Oscar Gray, an oil transport truck driver, was stealing oil for PB Oil Company. As a transport truck driver, Gray’s job was to pick up loads of oil at different leases and deliver the oil to the gathering company to be placed in the pipeline. When Gray delivered the oil to the gathering company, he turned in a manifest called a run-ticket that showed which well and which company had produced the oil. According to the informant, Gray was picking up oil from the Crews Lease, owned by Williford Energy Company, and delivering it to the gathering company with a fraudulent manifest showing PB Oil Company as the producer and the J.N. Johnston lease as the producing lease. Thus, PB Oil Company was paid for oil produced by another company.


Caught red-handed


On December 14, 2007, Nichols received information from an oil field informant that Gray had been dispatched to pick up a load of oil from the J.N. Johnston lease. Nichols had been monitoring that lease and knew that there wasn’t sufficient oil in the storage tank to comprise an entire load of oil. Nichols set up on the Johnston lease early in the morning while a private investigator for Williford Energy Company monitored the Crews lease.


Gray never showed up at the Johnston lease. He did, however, upload a full 180 barrels worth of oil from the Crews lease. When Gray arrived at the gathering company to deliver the oil, he was met by Ranger Johnson and DA Investigator Jeff Case. In his hand, Gray held a run-ticket that showed that the oil had been picked up at the J.N. Johnston lease and that PB Oil Company was the producer. We had our first break in the case.


Gray agreed to cooperate with law enforcement and provided us with a confession. He admitted that he had been stealing oil for Terry Smith for about a year and that Smith would pay him $500 to steal a load of oil from the Crews lease and deliver it to the gathering company as though it came from the J.N. Johnston lease.


On December 17, we subpoenaed the bank records of PB Oil Company from a local bank. We asked for the most recent transactions first, and within a day or two we were provided with documentation showing that Smith and Greening had moved over $60,000 from the company account immediately after Gray was stopped with the stolen load of oil. Based on the information we had from Gray and Nichols’ inspections of the leases, we obtained a warrant and seized about $60,000 from the PB Oil Company account and Smith’s and Greening’s personal accounts.


Over the next couple of weeks, Ranger Johnson, Nichols, and Case interviewed scores of oil field truck drivers. Mark McLean and Steve Moorhouse, both oil transport truck drivers, had similar stories regarding their dealings with Terry Smith. McLean stated that Smith approached him in 2005 to “move oil” from one lease to another and offered him $500 per load. McLean said he told his supervisor Frank Ackerman about Smith’s offer and that Ackerman laughed it off and said, “I wondered if they would ask you.” Moorhouse stated that Terry Smith approached him in March 2006. Smith offered him $500 per load to haul oil from the Crews lease and to put on the run-ticket that the oil had come from the J.N. Johnston lease. Moorhouse declined Smith’s offer.


Oil fingerprinting


In March 2008, Nick Nichols informed me that oil can be tested to determine its various components and that generally speaking no two oils are the same. Both the Johnston and Lowke leases had been shut down since December 14, 2007, and their tanks each held a significant amount of oil.


The typical oil lease contains a pumpjack that pumps the oil up from the ground and a tank where it is stored until it is picked up by a transport truck. Once the pumpjack pulls the oil up from the ground, it passes through the wellhead, then it goes through the flow line into the storage tank. In theory, the oil in the wellhead should be exactly the same as the oil in the storage tank.


DA Investigator Jeff Case contacted a professor at the petroleum engineering department at Texas A&M University. When Jeff explained to him what kind of testing we needed, he referred us to Dr. Roger Sassen, a Texas A&M geochemist and an expert in the field of oil comparison. Dr. Sassen has tested and examined oils from all over the world for several major oil companies. He was intrigued by our case and offered to work with my office at a reduced rate. (Unfortunately, DPS does not provide lab analysis for oil samples.)



Trial


By the time trial rolled around, the oil theft team had spent hundreds of hours investigating and preparing the case. We had so much evidence and so much information to present that I was worried that jurors would be overwhelmed. Also, I had become thoroughly immersed in the oil field industry and its terminology. I could talk about heating a tank, fracing a well, and pulling a bottom with the best of them. I had to remind myself that my jury pool would likely have the same minimal knowledge that I had when I first started working on this case.


I used a detailed PowerPoint presentation in my opening statement to provide the jury with a basic understanding of the oil field and its terminology. Willie Greening was the first witness; he provided an overview of the entire theft operation. He also explained how the oil field industry operates including how leases work and the use of oil transport trucks and saltwater haulers. According to Greening, the Lowke and Johnston leases were both poor producers that were incapable of producing much oil. Greening said that 80 to 90 percent of the checks made to cash in multiples of $500 were to pay drivers for stealing oil.