Petroleum Engineering Expert Witness’ Testimony About the Alleged Production Declines Excluded
Posted on January 8, 2025 by Expert Witness Profiler
Plaintiff Craig Yoho filed a lawsuit on behalf of himself and a putative class of mineral interest owners alleging damages from subsurface interactions between ten pairs of horizontally drilled and hydraulically fractured “parent” and “child” wells. Specifically, he alleged that the drilling and completion of a child well caused the parent well to produce less hydrocarbons and financial harm by decreasing the amount of royalties that will ultimately be received over the life of the parent well.
Plaintiff’s expert Paul Dudenas issued a supplemental report in which he opined that ten (10) of the fourteen (14) wells included in the original class definition suffered a permanent decline in the Estimated Ultimate Recovery (“EUR”), a projection of future oil and gas production.
The drop in EUR for a given well is how Dudenas calculated the alleged damages. In addition to damages opinions, Dudenas also opined on the cause of the alleged decline in EUR: “My analysis assumed that the drop in production seen in each Parent well correlates with a frac hit from the drilling of a Child well.”
Dudenas also admitted that there could be many other reasons for the perceived drop in EUR—not just the completion of the Child wells.
Defendants asserted that Dudenas “improperly assumed what it is Plaintiff’s burden to prove: that Defendants’ actions in drilling ‘child’ wells caused damage.” Defendants stated that Dudenas “fatally conceded that many possible causes exist for the alleged production declines, but he did not consider them, rule them out, or even review the available data.”
Petroleum Engineering Expert Witness
Paul Dudenas has more than 50 years of diverse engineering, management and teaching experience. He has developed and coordinated reservoir depletion strategies and production optimization programs for both conventional and unconventional shale, oil and gas fields.
Discussion by the Court
Defendants argued that Dudenas did not consider: whether there was (1) an intentional shut in for mechanical issues with the parent well unrelated to completion of the child well; (2) an intentional shut in of the parent well for market reasons; (3) an intentional shut in to ensure that operations on the surface well pad could be conducted safely; (4) a production decrease because of a pressure reduction in the parent well caused by depletion of the reservoir; (5) issues with scale build up on the parent well; (6) gathering system interruptions; or (7) pressure in the gathering system reduced the well’s production.
In addition, Defendants argued that Dudenas did not consider whether mitigating actions were taken by SWN Production. Defendants asserted that data concerning these other potential causes of EUR decline was made available to Dudenas; he just did not consider it.
Dudenas’ opinion offered a possible cause, but failed to consider other possibilities
Federal courts applying Daubert—including the Fourth Circuit—require the expert to consider other potential causes. The requirement that a causation expert consider and rule out other potential causes is not limited to medical experts.
The Court held that Dudenas’ opinion offered a possible cause, but failed to consider other possibilities. That there are alternative causes, and that Dudenas did not consider them, is undisputed. Dudenas admitted that other causes were possible but he did not consider them or rule them out.
For example, although each of the Parent Wells is surrounded by numerous Child Wells, not just the particular Child Well identified by Plaintiff, Dudenas did not consider whether these other Child Wells could have caused the alleged drop in EUR.
Beyond an analysis of each Parent Well’s Estimated Ultimate Recovery, other factors necessary for a causation inquiry include: mechanical and gathering system issues, location and timing of any Child Wells, the age of Parent Wells, and whether any mitigation techniques were employed.
To assess whether drilling of a Child Well was negligent, for example,
this Court would need to consider factors such as market considerations at the time of drilling of the Child Well, the location and spacing of each Child Well relative to each Parent Well and safety requirements such as the drilling of another well on the same pad. The Court held that Dudenas did not take into account any of the considerations.
Held
The Court granted the Defendants’ motion to exclude the opinions of Plaintiff’s expert Paul Dudenas.
Key Takeaway:
Dudenas was of the opinion that the drilling and completion of the child well near Plaintiff’s parent well caused a drop in the production of minerals in the parent well. The Court held that while Dudenas’ opinion offers a possible cause, it fails to consider other possibilities.
Asking and determining what caused a decline is not a common question. To assess why there was a decline requires analysis of facts surrounding the operation of each of the Parent Wells and nearby wells. This is a complex and individualized analysis that is not susceptible to classwide proof.
Beyond an analysis of each Parent Well’s Estimated Ultimate Recovery, other factors necessary for a causation inquiry include: mechanical and gathering system issues, location and timing of any Child Wells, the age of Parent Wells, and whether any mitigation techniques were employed.
Case Details:
| Case Caption: | Yoho Et Al V. Southwestern Energy Company Et Al |
| Docket Number: | 5:23cv101 |
| Court: | United States District Court, West Virginia Northern |
| Order Date: | January 7, 2025 |
