Suit: Oil exec used inside info from rival
Continental Resources accuses Hefner, others
Continental Resources has filed a lawsuit in Oklahoma County District Court accusing a prominent Oklahoma City independent oil and gas executive of working with one of Continental’s former employees to use the company’s confidential drilling plans in a scheme to acquire, hold and resell mineral rights.
In a case that alleges fraud filed on Friday, Robert Hefner V and his companies Hefner Energy and Hefner Energy Holdings are named as defendants.
Hefner is a fifth-generation energy executive and part of a historic Oklahoma City family of energy business men. He also is an investor, author, speaker and consultant.
Other defendants Continental Resources is suing as part of the same case are Justin Woody, who works for Hefner and also owns JCW Energy, former Continental Resources employee Matt Powe, five Jane and John Does and five unnamed entities.
Continental Resources seeks to prove in its lawsuit that Hefner, Woody and Powe and others used Continental Resources’ confidential information to either acquire and hold mineral rights or to acquire and then resell those rights to Continental or other parties at inflated values once the company’s drilling plans were publicly known.
When asked if he had anything to say about Continental Resources’ lawsuit, Hefner said, “the allegations are false, and I look forward to the opportunity to address these claims.”
Continental Resources claims in its court filings that Powe, who worked for the company as an engineering team leader between 2012 and 2017, had access to the company’s “most sensitive business information, including geology, petrophysics, drilling and leasing plans, well valuations and economic modeling.”
Continental accuses Powe of sharing that information with Woody and Hefner after he resigned from the company, violating corporate policies he had agreed to uphold while there, according to court records.
Continental Resources states in the filing it discovered the scheme in July 2021.
The action filed against Hefner on Friday follows Continental’s move earlier this year to add him and several other defendants to another case it filed in Oklahoma County District Court against Blaine Dyer and dozens of other defendants in 2020.
In that case, Continental Resources accuses the defendants of working with at least one of Continental’s former employees to cheat the company out of millions of dollars “through a series of fraudulent, disguised transactions using Continental’s most confidential business information” involving its future drilling plans.
The company argues the defendants used those plans to acquire mineral rights from landowners, then sold them to Continental Resources or other parties at inflated prices once the exploration and production company’s plans were publicly known.
At least two parties initially named as defendants in the first case have pleaded guilty to criminal charges in federal court that were brought against them for their roles in the scheme.
It appears a third, James Dyer (a cousin of Blaine Dyer’s) could face a federal indictment targeting him for his alleged involvement in the broader scheme, too.
On March 24, an attorney representing James Dyer in the criminal matter received an email from Assistant U.S. Attorney Julia Barry that asked whether or not his client planned to cooperate with the U.S. government in its ongoing probe or be included in a forthcoming indictment, according to court filings.
On March 30, the attorney representing James Dyer in Continental Resources’ civil suit filed a motion before District Court Judge Anthony Bonner that asks him to pause Continental’s ongoing litigation until James Dyer has had an opportunity to defend himself in federal court.
His attorney, Nick Larby, of Larby & Associates, argues that Judge Bonner should pause any ongoing discovery requests that have been served on James Dyer and his associated companies until his pending criminal matter has been adjudicated.
“Staying this civil action as to defendant J. Dyer is crucial to protect J. Dyer’s Fifth Amendment right against self incrimination because the criminal proceeding arises from the same allegations raised in this case,” Larby’s petition reads. “At this point, any further development of this lawsuit will necessarily undermine the likely criminal proceeding and J. Dyer’s constitutional rights.”
Bonner will hold a hearing on May 4 to consider James Dyer’s request. Meanwhile, the lawsuit Continental Resources filed against Hefner, Woody and Powe specifically accuses them of breaching fiduciary duty, tortious interference with contractual relations, the misappropriation of trade secrets and the misappropriation of business information.
An attorney representing Continental Resources in the matter declined to comment on the pending litigation Monday. Neither Woody or Powe could be reached for comment.