Free Notice (Other) - District Court of Colorado - Colorado

Case 1:01-cv-00413-JLK-BNB

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-K-0413 (BNB)

3 M.D. MARK, INC., 4 Plaintiff, 5 VS. 6 7 8 9 10 *********************************************************** 11 ORAL DEPOSITION OF JAY SKINNER VOLUME 1 12 *********************************************************** 13 14 15 16 17 18 19 20 Brandy 21 State 22 23 24 25 of Texas, in the offices of Winstead, Sechrest & Minick, located at 1201 Elm Street, Suite 5600, Dallas, Texas, in accordance with the Federal Rules of Civil Procedure and the agreement hereinafter set forth. Cooper, a Certified Shorthand Reporter in and for the ANSWERS AND DEPOSITION OF JAY SKINNER, produced as a witness at the instance of the Plaintiff, taken in the above-styled and -numbered cause on the 16th day of January, 2003, A.D., beginning at 10:58 a.m., before KERR-McGEE CORPORATION and ORYX ENERGY COMPANY, Defendants.

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PROPOSED TESTIMONY OF JAY SKINNER TAKEN ON 1/16/03 M.D. Mark Inc. v. Kerr-McGee et al. Case No. 01-K-0413 Deposition of Jay Skinner, Page 5 line 20 through Page 8, line 14
20 21 22 23 24 25 .... 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 .... 1 2 3 4 5 6 7 8 9 10 11 12 Q: A: Okay. Do you have a title -- or did you have a title when you were with -At the time it was associate geophysicist. I actually had a five-month training program when I first started and then I was transferred to the ­ the exploration group. Where did -- where did the training take place? At our facility, the technology center near Frankford Road in North Dallas. Was that the Richardson office or is that a different one? It was simply called the technology center. full time. And I've been employed as a geophysicist the entire time. Okay. I've worked gulf coast onshore and Gulf of Mexico offshore both exploration and production, so I have a pretty broad background of experience in the company. All right. So you were a summer intern in 1988; is that correct? Right. And then when did you get your master's degree? What year was it? 1989. Okay. And then in 1989, you went to work full time for Oryx? In June of '89. Okay. What subsidiary of Oryx did you go to work for, do you recall? Oryx had no subsidiaries at that time. It was Oryx Energy Company to my knowledge. Okay. And I worked in the headquarters in Dallas. And what was your job description? Very similar to now. I was a -- on a team with a geologist and an engineer working exploration in South Texas. Q: A: Tell me about your background. Give me your educational background. I have a master's degree in geology from the University of Oklahoma and a bachelor's degree from the University of Kansas. I've worked at Sun, then Oryx, then Kerr-McGee ­ Sun actually since 1988 as a summer intern, `89

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Okay. I don't think we had a specific name other than that. And then do you still perform the same function now that you did when you were with Oryx? I have more responsibility in that I'm relied upon more. I have more autonomy to direct my own work, but essentially, the same kind of thing, building prospects and working with geologists and asset teams to get wells drilled, develop and find reserves. So do you work in exploration and development? Presently it's development and occasionally I'm asked to look at exploration ideas and submittals

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forth ideas that will be further expounded upon by other asset teams. All right. But mainly it's development. And I take it in your -- so -- I'm sorry -- when you were first hired you were an associate geophysicist. And now what is your job description? Geophysical specialist -Okay. -- is the current name of the day. Okay. And what products or what kind of things do you rely upon to perform the tasks that you do? Seismic data, computer systems, well logs, information from engineers and geologists.

Deposition of Jay Skinner, Page 9 line 17 through Page 12, line 9
17 18 19 20 21 22 23 24 25 .... 1 2 3 4 5 6 7 8 9 10 and expenses and who would own the data, that sort of thing. Was that while you were an employee of -Yes. -- Oryx? Only as an employee. Okay. So who did the field acquisition when you were doing that? Other seismic contractors. They were not Oryx crews. Q: A: Q: A: When you went to work for Oryx, were you taught anything concerning restrictions on use of seismic data? When you say "restrictions," what do you mean? I mean that it -- only certain people could look at it, anything like that, or couldn't be given away or... No training was given. However, I was involved in shooting some 2-D seismic data and was involved in seismic permitting -- the seismic permitting process and so I became familiar somewhat with the legalities of permitting

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Okay. But this was in -- you know -- what year was that? '90, '91. And Oryx was shooting 2-D data in 1991? Yes. Where? Pearsall field. Where is that? South Texas. Okay. And do you know what the purpose was of shooting that data? It was to develop our field at Pearsall. Okay. Do you know how much it cost per mile to shoot that seismic data? Not exactly off the top of my head, but I would

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say somewhere in the vicinity, including permits, about 15,000 a mile for the 2-D data. How many miles of data was shot, do you recall? Not really, although I was probably involved in the majority of it. I would just be guessing, but I would say somewhere in the vicinity of 150 miles, something like that. So Oryx shot 150 mile line? No, several lines, maybe.

Deposition of Jay Skinner, Page 13 line 24 through Page 14, line 25
24 25 .... 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 A: Q: A: What do you mean by "license agreement?" An agreement to allow someone to have access to certain seismic data. I have seen -- I'm not sure. I have seen and signed agreements with companies when we have purchased data off the shelf and I have contracted with companies when we've shot data about who is entitled to see it and that kind of thing. So... All right. I want to talk to you about when you say you've seen contracts when you've purchased data off the shelf. What kind of data are you talking about? Speculative data. A seismic company was shot data, for instance, in the Gulf of Mexico over a large area and they sell it to several companies and we buy a portion of that data and we sign an agreement affecting what we do with that? Did you review any of those agreements? Not closely. All right. Did you pass them on to somebody else for review? Q: Okay. Have you ever seen a license agreement affecting seismic data.

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Yes. My -- when I looked at those documents, my main responsibility was to check that the data that it says we're getting is what we are, in fact, getting. The costs are in line and -- more technical issues than any legalities there.

Deposition of Jay Skinner, Page 23 line 22
22 23 24 25 Q: Okay. All right. So let me ask this then: When you were with Oryx Energy, were you involved in any way in the issue of what seismic data that was licensed by Oryx Energy should stay with Kerr-McGee?

Deposition of Jay Skinner, Page 25 line 16
16 A: So I probably did, but I don't know.

Deposition of Jay Skinner, Page 25 line 17 through line 19
17 18 19 Q: Okay. What, if anything, do you know about the lawsuit and about why we're sitting here today? Do you know?

Deposition of Jay Skinner, Page 26, line 2 through Page 28, line 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 A: Not a lot. I remember mainly through conversations with Brian that he and Glenn Morton were determining whether we needed to keep PGI seismic data because they were requesting that we pay additional money to transfer the license agreement to Kerr-McGee with the merger. And really that's all that I know. And that -that M.D. Mark/PGI believes that they're entitled to additional money for that. Q: Okay. Did you get involved in any other company's seismic data other than M.D. Mark/PGI? MR. HAMMOND: You mean as part of this merger issue? MR. PELZ: Yes. A: No, this is the only company where a question has come up to the level that they would ask me about anything. Q: (BY MR. PELZ) Okay. No Seismic Exchange, no Seitel, no Western, anything like that? A: I remember a general list of lines. And I don't recall if it was only PGI or if there were other companies' lines on there. I believe it was only PGI data. Q: Okay. Let me ask you this: Have you -- have you ever seen a map like Exhibit No. 6 before? This isn't the best copy in the world, but it's a -A: Yes, I sure have.

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.... 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 .... 1 it would work. Q: A: Okay. And when did you first see it? Well, a map like this is -- this was our old mapping system that we used every day that we could hi-light whatever lines from our search engine to display on a map. All right. Let's talk about that a second because you sort of smiled and I was like -- this was your old mapping system at Oryx? Yes. And what's the mapping system called? It was called Quick Map. Okay. And -And it has -- it resided on a mainframe computer that has since gone away and they replaced it with a system that doesn't work as well, so I wish we still had these maps. All right. So you could pull up any geophysical contractors' seismic data and put it on a map; is that right? No. We had -- we usually didn't keep that kind of information searchable. Well, when you say, "any geophysical contractors' lines," the ones that we owned, we could usually -- or the ones that we had a license to use, we could search on them based on contractor name and pull those out if it was -- well, that's -- that's basically how

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Deposition of Jay Skinner, Page 28, line 7 through Page 28, line 8
7 8 Can you tell me what areas of interest or -that Kerr-McGee has today as reflected on this map?

Deposition of Jay Skinner, Page 29 lines 5 through Page 32, line 15
5 6 7 8 9 10 11 12 13 14 15 16 17 18 My main area of emphasis down here at Starr, Hidalgo County. And we have a large 600 square mile 3-D in this area here. Polk County right in here, there's a field that I work. Q: (BY MR. PELZ) Well, you know -- hold it for me. Since we're doing this, we'll mark this map as confidential, too, and make sure that we don't -- if you need this for interpretation purposes, just to understand what it is -- would you take my pen and mark on the map the areas that, to your knowledge, Kerr-McGee is interested in any way. MR. HAMMOND: Well, are we talking about production or exploration? MR. PELZ: Either one. A:

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Personally I work in this area here. (BY MR. PELZ) And why don't you mark that as Exhibit No. 1 -- or just put a one on that, okay. And what is that called? South Texas Vicksburg area. Okay. Now, is that right where those seismic lines are located?

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Well, I wish it had our leases on here which would be easier to tell. But it's right on the county line and it looks like maybe this one extends over that. I don't know. Are you talking about the line that goes through the circle? Right. Okay. Now, point to what other ones. Polk County, and I'm not sure exactly -- I believe it's in the portion of the county here kind of in the southeast side. Why don't you put a No. 2 by that one. And we, again, have 3-D there that we've had for a long time. And what do you call that particular area? Double A wells. Okay. Is that an area or is that a... It's a field. It's a field? How big is the field, for example? As in size or -- or area aerial size? Yeah. 20 square miles. Okay. 30 maybe. All right. Where else?

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I know that we're doing some exploration in Chambers County. Where is that? If I could read better, I would tell you. I believe it's this one. Do you want to use this -- will this map -If I could just read that. Just take a look at it. I think it reads better. This is Chambers right there. Okay. So show me where that is on the map. Chambers County. Okay. And mark that as No. 3 then. All right. Any other areas that you're aware of? Ones that I personally work on, no. What about ones that you know other personnel for Kerr-McGee are working on? The Denver Julesberg basin in Colorado up in here is part of our HS resources. We have a huge ­

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Well, why don't you mark the -- the Julesburg basin -Where's Denver there? It's like here. So that's No. 4 then, right? Okay. Our Mocane-Laverne area in Oklahoma is these two counties. That would be 5. We have an area in Lee County, and I can't tell you exactly where it is. It's our Indian

basin area, New Mexico. All right. Why don't you put that as No. 6. Okay. MR. HAMMOND: Let's make clear that that's an approximation because he said he doesn't know where in Lee County. MR. PELZ: That's fine. MR. HAMMOND: Just to be comprehensive, he's made quite a big circle. MR. PELZ: Okay. A: Off the top of my head in thinking about it, that's really our -- only places I know we're drilling or actively looking. Q: (BY MR. PELZ) Okay. Other areas you can think of? A: No. Q:

Deposition of Jay Skinner, Page 38, line 17 through Page 38, line 18
17 18 Q: Okay. I'm going to show you what's been marked as Exhibit No. 5. Have you ever seen Exhibit No. 5 before?

Deposition of Jay Skinner, Page 38, line 21 through Page 40, line 22
21 22 23 24 25 .... 1 2 3 4 5 6 7 8 9 10 11 12 know I would not have done that. I would not have known that or kept a record of that. Okay. All right. Let's go through this and I want -- I want to look at Exhibit No. 6 and compare it to Exhibit No. 5. And maybe we have to make more circles again, I don't know. The first area listed on there is the Anadarko basin. Where's the Anadarko basin on Exhibit No. 6? It's in Oklahoma. It's the side of the -probably this. Around No. 5 here? Right. In that vicinity. A: Q: A: Not before today, no. (BY MR. PELZ) Did you provide any information to anybody that helped make up Exhibit No. 5? To my knowledge, I did not give anything this specific, no. It has the date I checked it out on and I

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Now, we're -- we're going to look at the -- the original -- or at least a better copy of the map -- and -and here's my question to you. It says, Anadarko basin AB 1 through 3 -- or is that 1-3? 1-3. Do you know where that is on -- on this map? And I'm looking at -- I'm referring to Exhibit No. 6, but I'm giving you the better copy for purposes of just trying to understand it. I wouldn't know if I didn't have a map that had red splotches on it, no. Okay. And do you recall why you looked at that particular seismic line on October 20th, 1999?

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I believe that this is an area that Ed Glassman and I looked at that was a prospect brought to us by another company that we quickly evaluated to determine if we wanted to get involved. And we decided in a short period of time that we did not and did not act upon obtaining leases or doing anything with that company. Okay. What company was that? They were out of Midland. I don't recall. Okay. The next thing I want to show you I'm marking as Exhibit No. 7. It's the supplemental response to plaintiff, M.D. Mark's, third request for production of documents and interrogatories. (Exhibit No. 7 was marked.) (BY MR. PELZ) And my question to you is, have you -- did you provide any information for these answers? What's the date on this? This is dated the -- January 14th. And if you look at page 3, I think that's where your name come up. Do you see where it says Jay Skinner and Edgar Glassman checked out PGI lines AB 1 through 3 -- or 1-3, AB 1-4, AB 1-5, and ABIP? Yes.

Deposition of Jay Skinner, Page 41, line 4 through Page 41, line 6
4 5 6 Q: (BY MR. PELZ) Well, did you provide any information to anybody that's listed on Exhibit No. -- what is that number now -- No. 7?

Deposition of Jay Skinner, Page 41, line 17 through Page 45, line 3
17 18 19 20 21 A: The first paragraph refers to what you just asked me about the Anadarko basin. And having read that, I'm quite sure that that's what that -- those lines were looked at to look at that prospect. Okay. Now -- so in other words, somebody brings

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you a prospect and when they bring you a prospect they bring you a map with an interpretation on it, right? Right. Saying that they got a hot idea?

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Right. And you as a geophysicist, you get out your own information -- you get out other information you have, whether it's seismic data or geological data or whatever else, and see whether you see something similar on your lines as to what they have in their map; is that right? We try to form our own opinion about the area, yes. And so in other words, when somebody brings you that prospect and the map and you looked at some of these M.D. Mark lines and by the way, what other data did you look at besides the M.D. Mark lines when they came in? I don't recall. But I do know that it was not a large number of lines, probably ten lines of which there are four noted there or something in that order. Okay. And you looked at your lines and you determined that you don't think is there what they think is there; is that right? I don't recall exactly why we declined to participate, but I think risk factor was the main thing. Because this would be a wildcat? Very much so. Okay. And -And the data -- and the quality of the data did

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not support spending the money to committing to something -The quality --- of that magnitude. The quality of what data? The entire data set, being able to build enough certainty to go ahead and commit to participating. Are you talking about the data set that you had or the data set that they brought to you. Both. Okay. Seismic, wells, production histories. For example, how much money would it have cost Kerr-McGee to invest in this thing that somebody brought to you? I can't recall a number at all, but it was a quite expensive deep well. Like -- what do you mean "quite expensive?" On the order of $5 million. Okay. And so is it fair to say that -- that you and Mr. Glassman then looked at the data that you had -- or

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that Kerr-McGee had and you looked at their data and decided it was too risky? That about characterizes it. Okay. And when you look at a seismic line, what

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factors do you look at that make you decide whether it's too risky or not? The seismic line is just a part of the puzzle. What it says and how confident you are in the entire interpretation as a whole and how many points you can rest on determine whether you have confidences in the idea or not. There's a whole myriad of factors that go into that. Okay. So when they brought the prospect to you, did they provide you seismic data to support the prospect? They showed us lines in their office and we did not take any from their office. Okay. We were only able to look at what we had. So did you show them the seismic lines that you had? No. We traveled to Midland to see their show and came back and looked at it ourselves. What do they call those? Is it a dog-and-pony show or -- is that the expression? Sure. Okay. It was actually interesting but just too risky. Okay. All right. Now, the next one on there is the -- lines 11, 11(a), 12, 16, 22 and 23 from the San Simon Channel survey. Where's that?

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I have no idea, truly. I -- I believe it's midcontinent Oklahoma somewhere near that, but that's really all I know.

Deposition of Jay Skinner, Page 47, line 20 through Page 48, line 16
20 21 22 23 24 25 .... 1 2 3 4 Q: A: Q: It's called ram pasture. There's a lot of ram pasture out there, right? Right. Okay. All right. Let me ask you these questions: Q: Okay. Now, seismic data can be used to find prospects, it can be used to develop fields, and it can be used to basically work in the negative in the sense that you can look at something and say, Well, based upon this information, we're not interested; is that correct? You can form a lot of opinions based on --

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When you were looking at the seismic data, did you have any conversations with anyone about a lawsuit or whether Kerr-McGee should be looking at the seismic data? At the time I was looking at the data, no. Okay. Did you have a conversation with anybody afterwards about looking at this data in relation to the lawsuit? No, not until this whole deposition. Okay. So you didn't have a conversation where somebody said, Well, you know, we shouldn't be looking at this because M.D. Mark says we shouldn't have it? Absolutely not.

Deposition of Jay Skinner, Page 54, line 11 through Page 55, line 1
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 .... 1 to look at or otherwise. From your review of -- of these interrogatories -- answers to interrogatories or Exhibit No. 5, can you think of any other instances where any of the M.D. Mark/PGI data was used by Kerr-McGee? MR. HAMMOND: Well, now, that misstates the testimony. The checked outlines as he indicated weren't -and as the supplemental response indicates, weren't necessarily used. MR. PELZ: I know you argue that. Q: (BY MR. PELZ) I'm just -- in a general sense. I'm not trying to hold you to the point that it was all used. But was there any other of the PGI or M.D. Mark data that was either checked out or utilized in any way other than we've just talked about here today? A: To my knowledge, no, I did not check out any data

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