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

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1 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 Pursuant to Notice and Rule 30 of the Federal Rules of Civil Procedure, this deposition was taken by the Plaintiff, at 1600 Stout Street, Suite 1400, Denver, Colorado, at 9:30 a.m., before Harriet Weisenthal, Registered Professional Reporter and Notary Public of the State of Colorado. DEPOSITION OF GLENN MORTON November 11, 2002 vs. KERR-MCGEE CORPORATION AND ORYX ENERGY COMPANY. Defendants. - - - - - - - - - - - - - - - - - - - - - - - IN THE UNITED STATES DISTRICT COURT FOR THE STATE OF COLORADO Civil Action No. 01-K-0413 (BNB) - - - - - - - - - - - - - - - - - - - - - - M.D. MARK, INC., Plaintiff,

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Deposition of Glenn Morton, Page 8, line 20 through Page 9, line 24
20 21 22 23 24 25 . . . .Page 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 And my question to you is this: When you were -- when these merger issues were going on about seismic data, I take it that the documents that Mr. Hammond provided to me were in your possession? During the merger, they were in my possession. All right. So, this is when you were employed by Oryx; is that correct? When I was employed by Oryx and Kerr-McGee, as manager of geophysics, for the Gulf of Mexico. All right. And as manager of geophysics, that was onshore data that you were in charge of; is that correct? No, sir. The Gulf of Mexico was offshore and -I am sorry. Did I say "onshore"? Yes, sir. I think so. I apologize. I meant offshore. Yes. That's offshore. Okay. Did you maintain a file in your office that contained all of the documents that were produced by Mr. Hammond? Yes, sir. Q: Okay. Prior to your last deposition, Mr. Hammond delivered some documents to me, and they were Bate numbers KM-1904 through KM-2487. And those documents are contained in two boxes I have here. And what I have done is, for the most part, is taken documents out of there to be marked as exhibits.

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Deposition of Glenn Morton, Page 13 line 5 through Page 14, line 12
5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Q: All right. Then, who was part of the decision-making team concerning the issue of seismic data in the merger? That would have been me, and I was the chief decision-maker in these issues; would have been -- Carlos was involved as legal counsel; would have been Pat Horsfall, who was the vice president of exploration; and there were several people who played advisory roles, but they were not really the decision-makers. All right. So, let's talk about that, then. If a decision was made as to whether a transfer fee would be paid, or seismic data would be returned -I am referring to onshore data. Okay. Then, was the decision -- were the

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decision-makers you, Pat Horsfall and Carlos Salazar? Yes, sir. Okay. Was Carlos Salazar there as the legal advisor? Yes, sir.

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Okay. When it was an issue based upon economic terms, who made that decision? Define economic terms. Whether money should be paid to transfer, or how much money, things like that. That would have been me. Pat Horsfall would have been involved, as vice president. She had -- she could overrule anything she wanted to, generally. I don't think she did on anything. All right. So, she could have overruled anything that you did or said? Yes, sir.

Deposition of Glenn Morton, Page 30 line 2 through Page 30, line 22
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Q: Did Mr. Schlirf report to you what, if any, budget Oryx would have to handle all of these seismic contract issues as part of the merger? Yes. And what was that? They wanted us -- it wasn't a hard and fast number, but they wanted us to stay under $25 million. And was that $25 million broken down between international, onshore, offshore things? No, sir. There was no breakdown whatsoever. All right. Did you -- did you acquire that information from Mr. Schlirf? And Dave Christian. Both of them told me the same thing. Was David Christian with Kerr-McGee? Yes, sir. And did Dave Christian sit in on meetings with you? Yes, sir. Some.

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Deposition of Glenn Morton, Page 38 line 20 through Page 40, line 12
20 21 22 23 24 25 Q: A: Q: A: Q: I am going to show you what I have marked as Exhibit No. 12. Yes, sir. Do you recall Exhibit No. 12? Yes, sir. Did you personally talk with anyone at

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. . . .Page 39 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 . . . .Page 40 1 2 3 4 5 6 7 8 9 10 11 12 Q: A: Q: A: Q: A: Q: A: All right. Did -- the Seitel data was onshore data, wasn't it? Not all of it, I don't believe. We have Seitel data in the Gulf of Mexico. All right. But you have onshore data too? I am almost positive of that. Okay. And do you know who the president of Seitel was? At that time, it was Paul Frame. Okay. He was CEO. He was the top guy. Seitel Data? Yes, sir. Who did you talk to? Bob Simon. And what about? I believe we talked about this last time. All right. What was Bob Simon's role? He was their chief negotiator for Seitel. I am not sure exactly of his title, but it was a vice president of something. Okay. Can you tell me why Glenn Morton -- or why you and Carlos and Dave Christian and Paul Schlirf were copied in on this letter? Yes, sir. This would have been -- come to Patricia Horsfall, and she sent all of this stuff down to us. All right. So, when Exhibit No. 12 came in, when this letter came from Kevin Callaghan, did you have a conversation with this group of people that you were talking to about whether fees would have to be paid in this part of the transfer? Well, we had, at this time, already had a list that, I believe, indicated that Seitel was going to have to be paid, because of the wording in their contract.

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Deposition of Glenn Morton, Page 41 line 4 through Page 42, line 19
4 5 6 7 8 9 10 11 12 13 Showing you what's been marked as Exhibit No. 14. This is a letter from Marilyn Davies of M.D. Mark. Yes, sir. This document has Dave Christian, Paul Schlirf, you, and Carlos Salazar. Yes. All right. Did you have a conversation with Dave Christian and Paul Schlirf concerning Marilyn Davies' letter of February 17th, 1999?

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I do not believe I did. Do you know who did? Who had a conversation? Was there any discussion at either Oryx or Kerr-McGee concerning Exhibit No. 14? Yes, there was. And when was the discussion? Well, I am not sure exactly when, but I would have discussed this with Carlos. And did you discuss it with Paul Schlirf? I don't remember discussing it -- this one with Paul Schlirf.

And how about Dave Christian? No, sir. (Discussion off the record.) BY MR. PELZ: Q: Did you ask anyone to do an evaluation of the M.D. Mark data, based upon this letter? A: Oh, I would have called Brian and asked him for an opinion as to whether or not they felt there was value in the -- keeping the data. Q: All right. Now, I just -- I want to understand the process. Did you ask Brian Lindsey to do an evaluation of databases before letters were sent out to the seismic data contractors or after? A: Oh, I can't recall exactly when we asked Brian to make some maps for us. We did ask for some evaluation or maps of what data they might have had, or a listing. And Brian did come back with a listing, and we got a box of contracts, and that's how that process worked.

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Deposition of Glenn Morton, Page 43 line 1 through Page 44, line 16
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Q: Okay. Do you recall when you first learned that M. D. Mark wrote to Oryx and told Oryx that the seismic data was not transferable? Do I remember what? When. When I learned it it was fairly late in the process. This letter did not wind its way to me, I don't believe, initially, because I learned, either late January or mid-February, that we had all of this onshore issue, and that was the first I heard of it. All right. When you say, "this letter," you are talking about 15? Yeah. Okay. And on October 16th, 1998, I will tell you, there was no reason for anybody to forward me this letter, because I was not in any sort of role at that point. I wasn't involved in transfer for the company

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at that point. When did you first get involved in the transfer issue? That would have been when I did that analysis for the Gulf of Mexico, which would have been, I guess, late November, early December, of '98. And that was merely to tell my bosses that we had a lot of

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Gulf of Mexico data that was going to require transfer fees. Okay. And do you know why -- I mean, how did you get the job? Did somebody point their finger at you and say, run with it? No, sir. Did you volunteer? I didn't, per se, volunteer. I alerted my boss there was an issue out there that upper management should be considering. You were familiar with the licensing of seismic data in the past? Yes, sir. And last time we talked about, you had even worked for PGI at one time? Yes, sir.

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Deposition of Glenn Morton, Page 55, line 7 through Page 55, line 16
7 8 9 10 11 12 13 14 15 16 Q: A: Q: A: Exhibit 21. Exhibit 21 was in your stack of documents. Who prepared Exhibit 21? I believe I did. And what did you prepare Exhibit 21 from? Um, it would have been from the listings given to us by these various contractors of the amount of data that was subject to a transfer. So, this is the gross amount of data licensed? It's a worst-case scenario.

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Deposition of Glenn Morton, Page 57, line 8 through Page 57, line 13
8 9 10 11 12 13 Q: A: All right. For whom did you prepare Exhibit No. 21? It would have been upper management. In general, in order to provide them with a worst-case scenario, and to scare them to death so that I could get them to pay attention to the issue.

Deposition of Glenn Morton, Page 54 line 13 through Page 61, line 5
13 Q: All right. Did you have any discussion

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with any of the individuals that are copied on this document? About this document? Yes. No. No reason to. They signed it and -Okay. Done deal. I am showing you what has been marked as Exhibit No. 23. Are you familiar with Exhibit No. 23? Yes, sir. This was also in your documents? Yes, sir.

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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 Who prepared -MR. HAMMOND: I am sorry. You are saying 23. His sticker says 21. MR. PELZ: I am sorry. It's 21. You are right. I apologize. I was looking at -- never mind. BY MR. PELZ: Q: Exhibit 21. Exhibit 21 was in your stack of documents. Who prepared Exhibit 21? A: I believe I did. Q: And what did you prepare Exhibit 21 from? A: Um, it would have been from the listings given to us by these various contractors of the amount of data that was subject to a transfer. Q: So, this is the gross amount of data licensed? A: It's a worst-case scenario. Q: All right. And did anyone ask you to prepare Exhibit No. 21? A: I don't recall, specifically. Q: On the third one down, item -- company down, Eastern Geophysical, there's a little asterisk or star behind it. What does that mean? A: I can't remember at this point. Q: Okay. Now, what data listed on Exhibit 21 is data relating to the United States or its coastal Q:

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1 2 3 4 5 6 7 8 9 10 11 12 A: Q: A: waters? Zero. Let's talk about the different data. Where is the Diamond Geophysical data? It's in various parts of the Gulf of Mexico. Off the top of my head, probably from 500 feet out to about 3,000 feet. All right. So, I said earlier, what data related to the United States and the coastal waters? Obviously, I am talking about -Coastal waters has a different definition, in my business.

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All right. Coastal waters refers to the waters that are controlled by the states. The real -- these are federal waters. All right. The federal waters extend out what? 200 miles? Is that what -Yeah. (Witness nodding in the affirmative.) Okay. Then let me ask the question again. I am sorry. I misunderstood. What data on this list refers to the continental United States and the federal waters

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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 A: surrounding the United States? Oh, most of it is -- refers to that. Seismic Australia, I don't believe, did. The Beagle Deep does not. That's in Australia. Robertson's Research, Australia, does not, and but I do think that Jebco data, in this case, with that number, does refer to the federal waters. All right. For whom did you prepare Exhibit No. 21? It would have been upper management. In general, in order to provide them with a worst-case scenario, and to scare them to death so that I could get them to pay attention to the issue. And when did you prepare Exhibit 21? That, I cannot remember. It would have been somewhere into the process, because we didn't do our own inventory. So this would have been based upon information received back from the contractors, is the best date I can put on it. Okay. So, Exhibit 21, then, would have been compiled after letters had been sent out? Um, I believe probably -- most likely. Then, how would you know whether a contract had a license transfer fee issue in it? I don't understand the question.

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1 2 3 4 5 6 7 8 9 10 11 Q: Well, did every one of the items of -did the companies listed on 21 -- take that back. Let me ask it in more -- in a different manner. At the time you prepared Exhibit 21, had you reviewed the contracts of the seismic contractors? I believe I would have, by this time -it would have been far enough into the process that I would have had reviews of at least some of the contractor data or contracts. Okay. Now, SEI is not on this list. No, sir.

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And why isn't SEI on this list? Well, this was, as I said, somewhere into the process, and it might not have been after the letters are sent out. We sent out letters in several waves, I believe. And SEI wasn't on there because I started out looking at the Gulf of Mexico, and then it began to expand. They said, well, why don't you look internationally. And there are some international companies on here. So, it was somewhere in that time frame. Now, some of the contracts you can read, and you can derive numbers from the contract. Is that what you did on Exhibit 21? Not all of them, no, sir. Western Geophysical would have been -- had to have told me how

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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 much data. There is no way I could have gotten that out of the contract, off of what Western Geophysical -Q: Okay. MR. HAMMOND: Let's, before you do that, let's take a break. We have been at this an hour and a half. MR. PELZ: Okay. (Recess.) BY MR. PELZ: Q: Okay. Are we ready? A: Uh-hum. Q: All right. I am going to show you what I have marked as Exhibit No. 22, and that's documents KM-002194 through KM-002203. And these are also documents that were in your list. A: Yes. Q: Is Exhibit 22 a list that you prepared? A: Yes, sir. Q: Do you know when this list was prepared, or Exhibit 22 was prepared? A: Over a period of time, from December of '98 up through probably mid-February, until late February. Q: Okay. All right. Was this list changed then?

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1 2 3 4 5 6 7 8 9 10 A: Q: A: Q: A: Q: A: Throughout that period, yes, sir. And how would it be changed, and what? Added to. All right. And what factors would cause a change? The discovery of more contracts. All right. To your knowledge, where were these additional contacts discovered from? We just kept expanding out and discovering more things. I mean, we had talked to

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people and they said, oh, yes, we bought such and such. Okay. And that led us to look for a contract. Was there any place that you could -central location where any of this information was kept? Yes, sir. Our storage facilities is where it was kept. When I took your deposition last time, I guess you talked about -- that you had actually kept copies of license agreements of data that you were using in your office. Yes, sir. And that others did not; is that correct? Yes, sir.

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1 2 3 4 5 Q: Okay. And I would take it that you would have a copy of the license agreement with the license. Would another copy be sent anywhere else, in a central location? Yes, sir.

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Deposition of Glenn Morton, Page 62, line 2 through Page 62, line 12
2 3 4 5 6 7 8 9 10 11 12 Q: All right. Did you personally go through each license agreement and take an applicable -- or take certain language and -Yes, sir. -- type it on this list? Yes, I did that. And did anyone give you guidance as to what language you should be looking for? Um, yes. And who was that person? Carlos.

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Deposition of Glenn Morton, Page 64, line 22 through Page 64, line 25
22 23 24 25 Q: Okay. So, I just want to understand: Copies of 22 went to Jeff Roberts, Carlos Salazar, Paul Schlirf. Was a copy given to Patricia Horsfall? I don't recall.

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Deposition of Glenn Morton, Page 66, line 10 through Page 67, line 3
10 11 12 13 going to make a mess of it. I want to show you what I am marking as Exhibit No. 23, and it's Bate No. KM-002445. Do you see that letter? Yes, sir.

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Okay. That letter was also in your list of documents. It may be a little difficult to dig it out of here, David, but -- all right. Do you recall this particular letter? Yes, sir. Who was it that made the decision that Veritas DGC, Inc. would receive this particular letter? I did, with legal counsel. Okay. And, in that letter, you were asking them -- are you telling them that your records need to be changed to reflect the name of the licensee to Oryx -- from Oryx Energy Company to Kerr-McGee Oil

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1 2 3 and Gas Corporation, a subsidiary of Kerr-McGee located in Houston? Yes, sir.

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Deposition of Glenn Morton, Page 67, line 25 through Page 68, line 20
25 Q: Okay. Now, Oryx Energy Company entered

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 into a merger with Kerr-McGee Corporation; is that correct? A: Yes, sir. Q: Okay. Now, Kerr-McGee Oil and Gas Corporation is a separate corporation, isn't it? MR. HAMMOND: Calls for speculation. No basis. THE WITNESS: Um, I am not a lawyer. BY MR. PELZ: Q: Okay. Who are you employed by today? A: Today, I am employed by Kerr-McGee North Sea UK, Ltd., that subsidiary. Q: Okay. Immediately after the merger, in March of 1999, who was your employer? A: Kerr-McGee Oil and Gas Corporation. Q: All right. And where were you located? A: Houston, Texas. Q: And what was your job title? A: Manager of geophysics for the Gulf of Mexico.

Deposition of Glenn Morton, Page 72, line 20 through Page 73, line 24
20 21 22 23 Q: To expedite this, I am just going to mark -- show what's been marked as Exhibit No. 25. It's KM-002302. Do you see that? Yes, sir.

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That's marked as Exhibit No. 25. This was a document that was in your records, and it says,

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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 "Reference is made to your letter dated April 28th, 1999. Kerr-McGee also desires to make a complete transfer of all data from the Oryx merger. We believe a fair price for this would be $1,500,000." Did you talk to David Christian before this letter was sent out? Um, yes. Tell me what you talked about? What -Largely, it was negotiation issues. How much we felt like the data was worth, what would be a fair offer. All right. Now, my -- the reason I want to bring this up is on -- when I looked at Exhibit No. 24, Exhibit No. 24 refers to SEI as asking for 3.5 million to transfer the seismic data. My question is, as of May 17th, 1999, the letter -- the date of Exhibit No. 25, did you know or did Kerr-McGee know, to your knowledge, that Seismic Exchange wanted $3 1/2 million to transfer their seismic data? Yes, sir. How did you know that? I sat with Bobby Patrick in the room and that's what he told me.

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Deposition of Glenn Morton, Page 84, line 17 through Page 85, line 19
17 18 19 20 21 22 23 24 25 Q: Okay. Okay. I am showing you what I have marked as Exhibit No. 29, which was in your documents. Yes, sir. To your knowledge, at the time Exhibit 29 was written, was Kerr-McGee in the process of packaging all of the data, all of the M.D. Mark data for return? Um, that's what the letter says. That's what the letter says.

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1 2 3 4 5 6 7 8 9 10 Q: A: Q: A: Q: A: Q: And you were copied in on this letter, as was Brian Lindsey? Uh-hum. (Witness nodding in the affirmative.) Did you direct anyone to package the data and to send it back? Um, I did not do that, no, sir. Do you know whether Brian Lindsey did? No, sir. Who would have been the person who would

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have made that decision? I don't -- the decision? Um, to tell someone to package up the data? Yes. Don't know. If that data were going to be packaged up, who would have been told to do that? People in the storage place would have been told to package it up and ship it out.

Deposition of Glenn Morton, Page 112, line 16 through Page 113, line 22
16 17 18 19 20 21 22 23 24 25 Q: Okay. Next item is -- I am marking as Exhibit No. 45 is the KM-002314. Do you recall that exhibit? Yes, sir. And you were copied in on that? Yes, sir. Did you have conversations with David Christian and Paul Schlirf about this letter? Eventually, we -- well, not about this letter in specifically, but eventually we would 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 Q: had conversations about the issue. What percentage of seismic contractors that you communicated with wanted a 50 percent transfer fee for the transfer of their data? I don't think, to the best of my knowledge, we ever paid 50 percent to anybody. That's not the question I asked. Okay. How many asked for that when they responded to you? Um, I don't know the answer to that question, because I haven't counted them up. Some contracts specified that, some didn't, and I just don't know what percentage. Okay. Was a 50 percent transfer fee fairly common in the industry? Um, not for final settlement it sure isn't. No. Was 50 percent -No. There's nothing common about any of these. Each company has its own policy. Some companies didn't even require a transfer fee.

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Deposition of Glenn Morton, Page 127, line 11 through Page 128, line 3
11 Q: I am going to show you what I have marked

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as Exhibit No. 53. Are you familiar with Exhibit No. 53? I am sorry. What's the Bate number on that? 2339. And it was a -- written to David Christian. And did you review this document before it was signed? Um, we would have discussed the money, yes, sir. Okay. And did Kerr-McGee pay TGS NOPEC $5,145,741? Just a second. No. How much did they pay them? Well, according to this, they would have paid them 4.25 million.

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1 2 3 Q: A: Okay. So, TGS NOPEC was paid $4,250,000; is that correct? That's what the document says.

Deposition of Glenn Morton, Page 146, line 1 through Page 147, line 4
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 Okay. All right. Okay. The next document I am marking will be Exhibit No. 59, and it is from you. And my question is, does everything in here all go together? A: I do not believe that the 2400 goes in here, but I can't be absolutely positive, but I would have to have had feedback from the geophysical contractors to have actually generated that list, and this was way too early in the process to have had any information from them. So, I don't believe 2400 goes with this thing. And let's see what else we got in here. "The first page summarizes the value of data subject to transfer fees by. . ." MR. HAMMOND: Off the record. (Discussion off the record.) THE WITNESS: Okay. On second thought, I presume that the second page did go there, but I am not sure where I got that -- those numbers. It's been a long time. Oh, yeah. What's missing out of here is that list. BY MR. PELZ: Q: Is what list? A: You have seen it before, but I haven't seen it today. It was a -- the three columns list. The seismic contracts affected by merger would not have Q:

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1 2 been done by 12/9/98. So, this part, from 2401 on, I know does not go with this. That was way too early.

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And what is missing off of this is that three-column page. You and I talked about it last time.

Deposition of Glenn Morton, Page 147, line 21 through 24
21 22 23 24 Q: Okay. You state, "Attached is the final report of the effect the merger will have on seismic licenses and data." Right.

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