WesternGeco L.L.C. v. Magseis FF LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
WESTERNGECO, L.L.C., §
§
Plaintiff, §
§
v. § CIVIL ACTION NO. H-22-3080
§
MAGSEIS FF LLC, §
§
Defendant. §
MEMORANDUM OPINION AND ORDER
This is a breach of contract action arising from Plaintiff,
WesternGeco L.L.C.’s (“Plaintiff” or “WesternGeco”) allegation that
Defendant, Magseis FF LLC (“Defendant” or “MSFF”) breached its
obligation to provide WesternGeco adequate notice and right of
first refusal (“ROFR”) for use of a particular ocean fleet and crew
(the “Z1 Crew”) for a deep water seismic survey known as
“Engagement 3” in the Gulf of Mexico (“GoM”) in the fall of 2022,
and potentially another survey known as “Engagement 4” in 2023.
Pending before the court are Defendant Magseis FF LLC’s Motion for
Summary Judgment and Brief in Support (“MSFF’s MSJ”) (Docket Entry
No. 63), and Plaintiff WesternGeco, L.L.C.’s Motion for Partial
Summary Judgment and Brief in Support (“WesterGeco’s MPSJ”) (Docket
Entry No. 72). Also pending are Plaintiff WesternGeco, L.L.C.’s
Response in Opposition to Magseis LLC’s Motion for Summary Judgment
(“WesternGeco’s Opposition to MSFF’s MSJ”)(Docket Entry No. 73);
Defendant Magseis FF LLC’s Opposition to Plaintiff WesternGeco,
L.L.C.’s Motion for Partial Summary Judgment (“MSFF’s Opposition to
United States District Court
Southern District of Texas
ENTERED
July 20, 2026
Nathan Ochsner, Clerk
Case 4:22-cv-03080 Document 79 Filed 07/20/26 in TXSD Page 1 of 43

WesternGeco’s MPSJ”)(Docket Entry No. 74);1 Defendant Magseis FF
LLC’s Reply in Support of Its Motion for Summary Judgment (“MSFF’s
Reply”) (Docket Entry No. 75);2 and Plaintiff WesternGeco L.L.C.’s
Reply in Support of Its Motion for Summary Judgment (“WesternGeco’s
Reply”) (Docket Entry NO. 78). For the reasons stated below,
WesternGeco’s MPSJ will be denied, MSFF’s MSJ will be granted, and
this action will be dismissed.
I. Undisputed Facts
WesternGeco is a business unit of SLB, an oilfield service
company formerly known as Schlumberger. WesternGeco engages others
to supply seismic data from underwater regions in hopes of locating
recoverable hydrocarbon reserves and/or other opportunities. MSFF
provides maritime seismic acquisition services, including vessels
and crews. WesternGeco hires contractors like MSFF to provide
vessels, crews, and equipment to acquire seismic data.
A. Engagement 2
Effective April 13, 2021, Westerngeco and MSFF executed a
Service Order (“Order 2”) for a project titled “Engagement 2.”3
1This instrument was also filed as Docket Entry No. 76.
2This instrument was also filed as Docket Entry No. 77.
3MSFF’s MSJ, Docket Entry No. 63, p. 8; WesternGeco’s MPSJ,
Docket Entry No. 72, p.8. See also Engagement 2 Service Order,
(continued...)
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MSFF completed Engagement 2 using the Z1 crew.4 After Engagement
2, the Z1 crew was obligated to other work until the August-
September 2022 timeframe.5
B. Letter Agreement
Because Engagement 2 suffered delays and cost overruns for
which MSFF was contractually responsible, MSFF asked WesternGeco
for additional compensation to cover costs that were beyond its
control but were not WesternGeco’s responsibility.6 Effective
March 31, 2022, the parties entered an agreement titled
Letter Agreement between WesternGeco L.L.C.
(“WesternGeco”) and Magseis FF L.L.C. (“MSFF”) for
Engagement 2 . . . Additional (Unowed) Compensation to
MSFF by WesternGeco and Commitment by MSFF to WesternGeco
for Future Gulf of Mexico (“GOM”) Ocean Bottom Node
(“OBN”) geophysical acquisition services” ([Letter]
“Agreement”).7
3(...continued)
Exhibit A-2 to MSFF Appendix, pp. 89-144, Docket Entry No. 63-1,
pp. 90-99, and Docket Entry No. 64, pp. 1-45. Page numbers for
docket entries refer to the pagination inserted at the top of the
page by the court’s electronic filing system.
4MSFF’s MSJ, Docket Entry No. 63, p. 8; WesternGeco’s MPSJ,
Docket Entry No. 72, p. 8.
5MSFF’s MSJ, Docket Entry No. 63, p. 9.
6Id.; WesternGeco’s MPSJ, Docket Entry No. 72, p. 9.
7Letter Agreement, p. 1, included in Exhibit B to Notice of
Removal, Docket Entry No. 1-2, p. 161.
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The Letter Agreement states in relevant part:
On 13th, April 2021, WesternGeco executed a Service Order
with MSFF to acquire the Engagement 2 seismic data survey
in the United States GoM (the “Service Order”). As of
31st March 2022 (the “Effective Date”), MSFF requests,
and WesternGeco agrees to make a one (1) time only
payment of, USD $4,000,000.00 in additional (unowed)
compensation to MSFF to cover MSFF cost overruns from
Engagement 2 acquisition. In exchange for the
aforementioned payment (which WesternGeco is not
obligated to pay under the Service Order), MSFF agrees to
the following with respect to future . . . surveys in the
GOM utilizing ZXPLR nodes . . .
Terms, Conditions and Services
1. As of the Effective Date, MSFF has a deep water OBN
crew . . . available for WesternGeco in the
August/September 2022 timeframe. MSFF is not in
receipt of any tenders/expressions of interest/
LOI’s/LOA’s/agreements/etc. for the same time slot.
2. Based upon the [] survey rates . . . quoted by MSFF
to WesterGeco in February 2022, MSFF will provide
WesternGeco with the following rates for the next
pending WesternGeco OBN sparse node survey,
notionally called Engagement 3 [];
a. Mobilisation fee: N/A (waived for Engagement 3)
b. Demobilisation fee: N/A (waived for Engagement
3)
c. Operational Day Rate: USD 456,275
d. Standby Day Rate: USD 433,462
* * *
The above quoted rates for Engagement 3 are firm
and fixed, and not subject to adjustment . . .
These rates apply to Engagement 3, to the extent
commenced on or before December 31, 2023. . .
3. . . . The parties shall execute a mutually agreed
service order . . . (to the extent possible), . . .
prior to commencement.
4. For the following WesternGeco sparse OBN survey in
the GoM, notionally called Engagement 4 . . . the
following rates will apply:
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a. Mobilisation fee: USD 3,046,978
b. Demobilisation fee: USD 2,273,931
c. Operational Day Rate: USD 474,166
d. Standby Day Rate: USD 450,458
* * *
The above quoted rates for Engagement 4 are firm
and fixed, and not subject to adjustment . . .
These rates apply to Engagement 4, to the extent it
commences on or before December 31, 2023. . .
5. . . . The parties shall execute a mutually agreed
service order . . . prior to commencement.
6. MSFF will notify WesternGeco with details of MSFF
GoM crew availability and crew schedule on a weekly
basis and additionally through meetings as required
by WesternGeco. . . MSFF will within twenty-four
(24) hours after executing this Agreement, inform
WesternGeco of any [existing offers from other
customers] that could impact MSFF GoM crew
availability. . .
7. MSFF will notify WesternGeco within twenty-four
(24) hours of MSFF’s receipt and/or submissions of
any new and/or subsequent tenders/expressions of
interest/LOI’s/LOA’s/agreements/etc. [offers from
other customers] that might impact MSFF GoM crew
availability. MSFF shall provide WesternGeco with
timelines and other relevant information,
including, but not limited to, estimated contract
award date, scheduling and any changes thereto.
8. Upon receipt by WesternGeco of a notification from
MSFF under Article 6 or Article 7 above,
WesternGeco shall have ten (10) business days to
execute a written agreement with MSFF and
WesternGeco will secure the availability of the
MSFF crew from the very next day that crew
completes demobilising from its prior project.
Should MSFF not be able to grant WesternGeco these
ten (10) business days due to the terms of any
existing and/or future tenders received by, or
offers made or received by MSFF prior to or after
the Effective Date, MSFF will, within twenty-four
(24) hours after receipt of such tenders and/or
offers, provide WesternGeco with the tender and/or
offer acceptance timeline and WesternGeco may
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formally execute a written agreement with MSFF in
connection with that timeline, and by doing so
WesternGeco will secure the availability of the
MSFF crew from the very next day that crew
completes demoblising from its prior project. To
allow MSFF to respond to tenders and/or offers
where WesternGeco elects not to move forward with a
survey window, WesternGeco will not unreasonably
withhold or delay its response to MSFF.
9. In the event that WesternGeco cannot commit to a
notification provided by MSFF, all articles in the
section headed Terms, Conditions and Services . . .
of this Agreement will continue to apply until the
time a service order is executed for both
Engagement 3 and Engagement 4. For the avoidance
of doubt, this Letter Agreement is not a promise .
. . that MSFF will be engaged by WesternGeco to
conduct Engagement 3 and/or Engagement 4.
10. Upon WessternGeco’s receipt of MSFF’s invoice by no
later than April 14th, 2022, WesternGeco shall make
payment to MSFF of USD $4,000,000.00 by April 30th,
2022.
11. This Agreement shall commence on the Effective Date
and remain in effect until December 31st, 2023 (the
“Term”).
12. This Agreement shall be governed, interpreted and
enforced according to the laws of the state of
Texas, without regard to conflict of law provisions
that would require application of the substantive
laws of another jurisdiction. Any claim to
interpret or enforce this Agreement must be
brought, solely and exclusively, before the state
or federal courts in Fort Bend County, Texas and
can only be tried by bench trial. Each party on a
fully informed and knowing basis, waives all rights
to a jury trial. The prevailing party in an action
to enforce this Agreement will be entitled to
recover its reasonable experts’, attorneys’ and
collection agency fees and all court costs, fees
and expenses.8
8Id. at 4-6, Docket Entry No. 1-2, pp. 162-64.
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C. Execution of the Letter Agreement
After executing the Letter Agreement WesternGeco timely paid
the $4,000,000.00 unowed compensation to MSFF for cost overruns
from Engagement 2,9 and the parties met at least weekly to discuss
crew availability as contemplated by Article 6.10 Following the
weekly meetings, Gary Poole, WesternGeco’s Multi-client New
Ventures Lead,11 sent emails summarizing GoM crew availability and
interest from other companies to his superiors: Ibrahim Moussa,
WesternGeco’s President;12 Will Gowans, WesternGeco’s Vice-President
(now President);13 and Tristan Allen, WesternGeco’s Global New
Ventures Manager.14 Their counterparts at MSFF were Simon Hayter,
MSFF’s Chief Sales Officer,15 and Carel Hooijkaas, MSFF’s Chief
Executive Officer.16
9WesternGeco’s MPSJ, Docket Entry No. 72, p. 9.
10MSFF’s MSJ, Docket Entry No. 63, pp. 9-10. See also April
11-May 27, 2022, email chain, Exhibit D of MSFF Appendix, pp. 304-
306, Docket Entry No. 65, pp. 5-7.
11MSFF’s MSJ, Docket Entry No. 63, p. 11.
12Id. at 13.
13Id. at 11.
14Id. at 16. See also June 9, 2022, email chain, Exhibit F of
MSFF Appendix, pp. 322-23, Docket Entry No. 65, pp. 23-24.
15WesternGeco’s MPSJ, Docket Entry No. 72, p. 16.
16Id. at 18.
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On June 16, 2022, MSFF and an Exxon subsidiary — Esso
Exploration and Production Guyana Limited — executed a Memorandum
of Understanding (“MOU”) obligating them to negotiate a work order
for use of the Z1 crew on a project anticipated to commence in the
September 2022 timeframe.17 The same day, MSFF’s Hayter emailed
WesternGeco’s Poole on the subject “Z1 Availability etc.” stating:
This afternoon (16th June 2022) we received formal
correspondence from an operator to use the Z1 XPLR crew
for a campaign immediately after the current survey.
What is the official status of SLB’s Engagement 3 project
and the associated Letter of Authorisation & permit?
Let me also add that we have the 2nd XPLR crew running in
the GoM plus a 3rd deepwater crew operating in Egypt.
Both crews will finish their current campaigns in
July/August.
We look forward to meeting at your convenience to discuss
further.18
Poole responded by asking “is the Z1 XPLR crew you mention here the
‘Appomattox’ or the ‘Mad Dog’ crew,” to which Hayter replied, “It’s
the ‘Mad Dog’ crew.”19
17MOU, Exhibit A-5 of MSFF Appendix, pp. 154-59, Docket Entry
No. 64-1, pp. 6-11. See also MSFF’s MSJ, Docket Entry No. 63,
p. 10 & n. 17 explaining that “Z1 is designated here by reference
to the vessels REM Saltire and Sanco Spirit.”
18June 16, 2022, email, Exhibit G of MSFF Appendix, p. 326,
Docket Entry No. 65, p. 27.
19Id.
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Poole forwarded Hayter’s email to Gowans, and together with
Gowans drafted the following email that Poole sent to Moussa and Allen:
See below notification of crew utilization from MSFF
relative to the crew that is intended for our Engagement
3 project. Hayter indicates that an operator has
provided MSFF with “formal correspondence” to use that
crew on completion of their current BP work on the
Atlantis and Mad Dog proprietary surveys, due to finish
end of August (however, that is a single source vessel
crew, so potentially higher mob/de-mob cost if they have
to bring in a second source), or around the same time,
their crew that’s working in Egypt is available (even
higher mob/de-mob into US GOM).
Referencing our Agreement with MSFF, they have to notify
us within 24 hours of MSFF’s receipt of LOI/LOA. It
would appear that is what Hayter is doing in his email.
We now have first right to that crew and up to 10
business days to execute an agreement with MSFF to use
that crew, unless the terms of the LOI/LOA they received
give them less than 10 days to respond, in which case we
have the same time frame to work within. MSFF are
required to tell us what that timeframe is.
I can have a call with Hayter tomorrow morning to
understand the relevant timelines and request written
confirmation of those.20
Although not included in the above quoted email to Moussa and
Allen, the following references to the Letter Agreement were made
in the color-coded draft for this email prepared by Poole and
Gowans:21
20June 16, 2022, email, Exhibit G of MSFF Appendix, p. 325,
Docket Entry No. 65, p. 26.
21MSFF MSJ, Docket Entry No. 63, p. 11 & n. 22 (citing color-
coded email chain showing Gowans’ revisions to Poole’s draft,
Exhibit H of MSFF Appendix, p. 329, Docket Entry No. 65, p. 30, and
explaining that in the draft email, red typeface indicates text
supplied by Gowans). See also Oral and Video Deposition of William
(continued...)
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Referencing our Letter Agreement with MSFF, the below
points are relevant .....
Article 7: “MSFF will notify WG within 24 hours of MSFF’s
receipt of LOI/LOA etc”. I assume Simon’s notification
is in accordance with this.
Article 7: “MSFF will provide WG with timelines and other
relevant info including estimated contract award date
relative to any such LOI/LOA’s received”. We should ask
MSFF for the LOI/LOA timelines and expected contract
award date and timelines.
Article 8: “Upon receipt of notification from MSFF (as
per Article 7), WG shall have 10 business days to execute
a written agreement with MSFF”. WG should have 10
business days to secure the crew unless ......
“Should MSFF not be able to grant WG 10 business days due
to terms agreed prior to execution date of the
WesternGeco Letter Agreement and/or future tenders, then
MSFF shall provide WG with the acceptance timeline and WG
can execute a written agreement within the same
timeline”. If the operator talking to [MSFF] is Equinor,
Shell or BP there may be existing terms from before our
agreement that mean [MSFF] don’t have to give us a[s]
much as 10 days to execute a contract with them.
However, if it’s new work, e.g. XOM Guyana, they should
have to give us the full 10 business days. But they do
have to tell us what that timeline is.22
On June 17, 2022, Poole spoke with Hayter and they each
summarized their discussion in emails to their superiors. In an
email to Allen and Gowans, Poole wrote in pertinent part:
It appears it is Exxon who are trying to secure this crew
from MSFF for a campaign in Guyana. MSFF have some sort
of conditional letter of intent in their hands. They are
unsure whether Exxon will realistically be in a position
21(...continued)
Copeland Anderson Gowans (“Gowans Deposition”), pp. 67:25-68:3,
Exhibit I of MSFF Appendix, p. 349, Docket Entry No. 65, p. 50
(“Q. All right. So, the words in red are authored by you in
response to Mr. Poole’s solicitation of input regarding his draft
email, correct? A. That’s correct.”).
22June 16, 2022, email, Exhibit H of MSFF Appendix, p. 329,
Docket Entry No. 65, p. 30.
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to commence work in the Aug/Sep timeframe, so there is
possibly a window for us to start Engagement 3
acquisition at that time if Exxon are not ready. MSFF
are expecting to discuss with Exxon on Monday about what
“it” is and when.23
In an email to Hooijkaas and others, Hayter wrote:
Gary [Poole] called. He’s asking how long he has to make
a call. I told him we’d let SLB know on Monday as we
need further information before giving a deadline.
No details on “formal correspondence” was shared but Gary
suspects this is Exxon Guyana.
He has no insight as to whether SLB receives permit and
LOA early next week.
He feels that to this point, we have maintained dialogue
and good transparency on a weekly basis, so he has no
complaints.
Let’s revert after the Exxon mtg . . .24
On June 21, 2022, Hayter emailed Poole stating:
Things have progressed since we spoke on Friday. The
company I referred to below has now provided signed
documentation requesting the Z1 XPLR crew immediately
following Mad Dog.
What is the official status of SLB’s Engagement 3 project
and the associated Letter of Authorisation & permit?
My comment below regarding the 2nd XPLR crew and the
deepwater MASS crew still stands, although both crews
have varying levels of interest.
With regard to the Z1 XPLR crew, we will continue to
investigate the possibility of sliding a survey between
Mad Dog and Company X, even though we have no
unconditional award from SLB.25
23June 17, 2022, email (RE: [Ext] Z1 Availability etc.),
Exhibit J of MSFF Appendix, p. 397, Docket Entry No. 65, p. 98.
24June 17, 2022, email (FW: Z1 Availability etc.), Exhibit F
of WesternGeco Appendix, p. 21, Docket Entry No. 72-1, p. 28.
25June 21, 2022, email (RE: Z1 Availability etc.), Exhibit A-6
(continued...)
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On June 23, 2022, Hayter sent another email to Poole writing
in pertinent part, “[a]s stated in my recent emails, paperwork has
been received for the crew immediately following Mad Dog. Can you
shed any light on the SLB permit & LOA status?”26 Poole responded:
Thanks for the update. We’re still focused on the ZXPLR
crew and would like to get the Engagement 3 Work Order
prepared (to include a mutually agreeable termination
clause, so we can secure the crew unconditionally). . .
I think it would be useful if we agree on a [maybe daily]
meeting schedule so we can iron out a contract
efficiently.27
On June 29, 2022, Poole met with Hayter and other MSFF
personnel. In pertinent part, Poole summarized the meeting in an
email to Gowans and Allen, that was copied to Moussa, as follows:
! Hayter talked about Egypt “MASS” crew being
available in our timeframe. Different node
technology, but previously used by Anadarko in GoM.
! Hayter said they are progressing towards a contract
with Company X. He said he is assuming they will
not have a contract with us as it is nearly 10
business days since he let us know that they had
paperwork from company X. Lot’s of chatter about
when we get our LOA etc as we have heard before. I
see little in the way of intention to giving us any
priority.
! I told Hayter that our intention was to be in a
position to finalize a contract, which is why we
were getting their cost estimates.
25(...continued)
of MSFF Appendix, p. 161, Docket Entry No. 64-1, p. 13.
26June 23, 2022, email (RE Engagement 3 price estimate),
Exhibit P of MSFF Appendix, p. 525, Docket Entry No. 66, p. 26.
27Id.
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! Company X are saying they are ready to start
acquisition in September, MSFF are a bit less sure
of X’s readiness, but continuing to take them at
their word.
! At the end, Hayter asked whether we could send them
a draft Service Order.
Can discuss tomorrow.28
Allen responded almost immediately stating in pertinent part: “As
expected, [Hayter] now stating 10 days is triggered and backdated
to his first notification of receiving ‘paperwork.’”29
On June 30, 2022, WesternGeco debated internally whether to
ask MSFF for a “formal clock” on the 10-business day ROFR period.
Poole exchanged text messages with Allen agreeing that they should
ask MSFF for a “formal clock,” but deferred the decision to
Gowans.30 That evening Poole emailed Allen the following:
Sat down with [Gowans] and we decided that there’s no
point in [Moussa] talking to [Hooijkaas]. I will
continue to push [Hayter] for cost numbers in the
meantime.
If we ask him for a formal clock I imagine they will say
it started 10 days ago. If we don’t ask, then there’s
still an argument to say we never had a formal
notification. There’s no great option.31
28June 30, 2022, email (Magseis meeting today), Exhibit R of
MSFF Appendix, p. 534, Docket Entry No. 66, p. 35. The date of the
email is June 30th instead of June 29th because it was sent just
after midnight.
29Id.
30Poole-Allen June 30, 2022, text messages, Exhibit EE of MSFF
Appendix, pp. 689-90, Docket Entry No. 67, pp. 90-91.
31June 30, 2022, email (MSFF end of day), Exhibit S of MSFF
Appendix, p. 537, Docket Entry No. 66, p. 38.
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Allen responded, “Ok thanks Gary. Don’t they need to provide
evidence? Or they can just verbally say clock started? Surely we
put something in [t]he agreement?”32
D. MSFF Withdraws the Z1 Crew from the Gulf of Mexico
On July 15, 2022, MSFF informed WesternGeco that the Z1 crew
was leaving the GoM and was no longer available for Engagement 3.33
WesternGeco objected to MSFF’s decision to withdraw the Z1
crew from the GoM and on July 16, 2022, Gowans sent Hayter a Notice
of Defective Performance.34
On July 19, 2022, WesternGeco sent MSFF a draft Service Order
for Engagement 3.35
On July 20, 2022, Hayter responded to WesternGeco’s Notice of
Defective Performance and draft Service Order in the following
email to Gowans that was copied to Poole and Allen:
32July 1, 2022, email (Re: MSFF end of day), Exhibit S of MSFF
Appendix, p. 537, Docket Entry No. 66, p. 38.
33MSFF’s MSJ, Docket Entry No. 63, p. 18; WesternGeco’s MPSJ,
Docket Entry No. 72, p. 13.
34MSFF’s MSJ, Docket Entry No. 63, pp. 18-19; WesternGeco’s
MPSJ, Docket Entry No. 72, p. 13. See also July 16, 2022, email
(Notice of Defective Performance), Exhibit A-8 of MSFF Appendix,
pp. 166-68, Docket Entry No. 64-1, pp. 18-20.
35MSFF’s MSJ, Docket Entry No. 63, p. 19. See also July 19,
2022, email (Service Order MSFF Engagement 3_OBN 19th July draft),
Exhibit Z of MSFF Appendix, pp. 557-606, Docket Entry No. 66,
pp. 58-100, and Docket Entry No. 67, pp. 1-7.
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We’ve been updating SLB with news on XPLR1 (and other
crews) since we were required to. In very pointed emails
of 16th June, 21st June, and 23rd June informing SLB of
the receipt of paperwork from Company X, we asked the
question of how ready the Engagement 3 project was.
Other than responses to acknowledge the updates we had
given, not once did SLB answer the questions we asked
about project readiness (required paperwork and permits
etc.) or use the opportunity to send a service order
draft.
During a call on 15th July, we stated XPR1 was leaving
the GoM and pointed SLB toward MASS3 as a suitable option
to acquire Engagement 3 in 2022. We again asked the
question about Engagement 3 readiness with respect to
receipt of LOA & permit but were refused an update.
However, we stated we are now working on a timing/
costing/logistics model for delivering a MASS III crew
into GoM as soon as possible.
Only yesterday (19th July) did we receive a draft service
order from SLB to review, discuss and negotiate. This
could have been delivered to us as far back as April 2022
since there are a lot of items that need addressing.
Already at a glance we see a clause related to “capped
termination fee due to lack of BOEM permit”. MSFF is not
in a position to take risk on permits. Not in the GoM or
any other geography. . .36
MSFF and ExxonMobil did not finalize a contract for the Z1 crew
until August 16, 2022.37
On August 5, 2022, WesternGeco filed this action in state
court alleging that MSFF breached the Letter Agreement by
committing the Z1 crew to another customer without providing
WesternGeco the required notice and right of first refusal.38
36July 20, 2022, email (Re: Notice of Defective Performance),
Exhibit FF of MSFF Appendix, p. 692, Docket Entry No. 67, p. 93.
37WesternGeco’s MPSJ, Docket Entry No. 72, p. 13. See also
Seismic Order #A4016483, Exhibit E of WesternGeco Appendix, pp. 14-
16, Docket Entry No. 72-1, pp. 21-23.
38Original Petition (“Petition”), included in Exhibit B to
(continued...)
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Alleging that it would have to pay another company more than the
Letter Agreement’s pricing for its desired survey, WesternGeco
seeks monetary damages, fees, costs, expenses, and pre- and post-
judgment interest.39
On September 9, 2022, MSFF answered WesternGeco’s action by
asserting in pertinent part that
[o]n June 10, 2022, [MSFF] notified WesternGeco by email
of a competitor’s desire to use the Z1 XPLR seismic crew
on a Gulf of Mexico campaign immediately after the
current survey ended in July/August 2022. On June 21,
2022 [MSFF] followed up and advised WesternGeco by email
that the competitor had now submitted a written request
for the Z1 XPLR seismic crew.
WesternGeco did not respond within 10 business days to
either written notice from [MSFF] and did not comply with
the Letter Agreement for Engagement 2 Service Order.
[MSFF] performed all of its obligations under the Letter
Agreement for Engagement 2 Service Order.40
On September 9, 2022, MSFF removed WesternGeco’s action to
this court.41
38(...continued)
Notice of Removal, Docket Entry No. 1-2, pp. 5-8 ¶¶ 16-27.
39Id. at 9. In the Petition, WesternGeco alleged that it would
have to pay another company $12-16 million more than the Letter
Agreement pricing, see id. at 8 ¶ 27, but has subsequently stated
that it contracted with another company for approximately $11.3
million more than the Letter Agreement pricing. See Memorandum
Opinion and Order, Docket Entry No. 52, p. 12 n. 19 (citing
WesternGeco’s Amended Motion for Preliminary Injunction, Docket
Entry No. 44, p. 9).
40Magseis FF LLC’s Original Answer to WesternGeco, L.L.C.’s
Original Petition, included in Exhibit B, to Notice of Removal,
Docket Entry No. 1-2, pp. 19-20. The reference to June 10, 2022,
appears to be a typographical error, as the undisputed evidence
shows that MSFF noticed WesternGeco on June 16, 2022.
41See Notice of Removal, Docket Entry No. 1.
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II. Standard of Review
Summary judgment is authorized if the movant establishes that
there is no genuine dispute about any material fact and the law
entitles it to judgment. Fed. R. Civ. P. 56. Disputes about
material facts are “genuine” if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.
Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2511 (1986). A
“party moving for summary judgment must ‘demonstrate the absence of
a genuine issue of material fact,’ but need not negate the elements
of the nonmovant’s case.” Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (en banc) (per curiam) (quoting Celotex
Corp. v. Catrett, 106 S. Ct. 2548, 2553 (1986)). “If the moving
party fails to meet this initial burden, the motion must be denied,
regardless of the nonmovant’s response.” Id. If, however, the
moving party meets this burden, Rule 56 requires the nonmovant to
go beyond the pleadings and show by admissible evidence that
specific facts exist over which there is a genuine issue for trial.
Id. “[T]he court must draw all reasonable inferences in favor of
the nonmoving party, and it may not make credibility determinations
or weigh the evidence.” Reeves v. Sanderson Plumbing Products,
Inc., 120 S. Ct. 2097, 2110 (2000). Factual controversies are to
be resolved in favor of the nonmovant, “but only when there is an
actual controversy, that is, when both parties have submitted
evidence of contradictory facts.” Little, 37 F.3d at 1075. Where,
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as here, parties have filed cross-motions for summary judgment,
each motion “must be considered separately, as each movant bears
the burden of establishing that no genuine [dispute] of material
fact exists and that it is entitled to judgment as a matter of
law.” National Federation of the Blind of Texas, Inc. v. City of
Arlington, Texas, 109 F.4th 728, 733 (5th Cir. 2024), cert. denied,
145 S. Ct. 1311 (2025) (quoting National Press Photographers
Association v. McCraw, 90 F.4th 770, 781 (5th Cir. 2024), and
citing Fed. R. Civ. P. 56(a)).
III. Cross-Motions for Summary Judgment
WesternGeco asserts a single claim for breach of contract
pursuant to Texas law alleging:
23. The Letter Agreement is a valid and enforceable
contract.
24. WesternGeco fully or substantially performed its
contractual obligations under the Letter Agreement
by paying [MSFF] four million dollars ($4 million
USD) in unowed compensation.
25. Pursuant to the Letter Agreement, [MSFF] agreed to
provide written notice of any potential engagement
and to allow WesternGeco to exercise its
contractual right of first refusal. As it pertains
to Engagement 3, [MSFF] materially breached the
Letter Agreement by failing to provide the required
notice before accepting another contract of
employment.
26. This constitutes a material breach, as WesternGeco
was not provided the benefit of the bargain for
which it paid [MSFF] four million dollars. . .
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27. [MSFF]’s breach injured WesterGeco, which resulted
in Engagement 3 related damages, including but not
limited to WesternGeco’s additional costs in
securing alternative seismic acquisition services,
which will result in at least twelve million
dollars ($12 million USD) to sixteen million
dollars ($16 million USD) in additional costs and
other business, operational and contractual related
consequences to WesternGeco.42
The parties do not dispute that the Letter Agreement is a
valid contract, and that WesternGeco performed by paying MSFF
$4,000,000. At issue is whether MSFF breached the Letter Agreement
by contracting the Z1 Crew to ExxonMobil without giving WesternGeco
notice required to trigger the ROFR.
A. Applicable Law
Article 12 of the Letter Agreement states that “[t]his
Agreement shall be governed, interpreted and enforced according to
the laws of the state of Texas,” that “[a]ny claim to interpret or
enforce this Agreement . . . can only be tried by bench trial,” and
that “each party on a fully informed and knowing basis, waives all
rights to a jury trial.”43 “Texas has a strong public policy
favoring freedom of contract,” and “Texas courts regularly enforce
unambiguous contract language agreed to by sophisticated parties in
arms-length transactions.” James Construction Group, LLC v.
42Petition, included in Exhibit B to Notice of Removal, Docket
Entry No. 1-2, p. 8 ¶¶ 23-27.
43Letter Agreement, p. 3 ¶ 12, included in Exhibit B to Notice
of Removal, Docket Entry No. 1-2, p. 164.
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Westlake Chemical Corp., 650 S.W.3d 392, 403 (Tex. 2022) (citing
Chalker Energy Partners III, LLC v. Le Norman Operating LLC, 595
S.W.3d 668, 673 (Tex. 2020)). Under Texas law “[i]f the written
instrument is so worded that it can be given a certain or definite
legal meaning or interpretation, then it is not ambiguous and the
court will construe the contract as a matter of law.” Coker v.
Coker, 650 S.W.2d 391, 393 (Tex. 1983). The parties do not dispute
that Texas law governs the Letter Agreement, and neither party
argues that any part of that agreement is ambiguous.44 Therefore,
interpretation of the Letter Agreement is a question of law. Texas
courts “construe the language of an unambiguous contract according
to its plain meaning, attempting to give effect to all provisions.”
James, 650 S.W.3d at 403 (citation omitted).
The elements of a breach-of-contract claim under Texas law are
(1) the existence of valid contract between the parties,
(2) performance or tendered performance by the plaintiff,
(3) breach by the defendant, and (4) damages sustained by the
plaintiff as a result of that breach. Pathfinder Oil & Gas, Inc.
v. Great Western Drilling, Ltd., 574 S.W.3d 882, 890 (Tex. 2019).
The first two elements of WesternGeco’s breach of contract claim
are not in dispute. “‘Breach’ of a contract occurs when a party
fails to perform an act it has contractually promised to perform.”
44WesternGeco’s MPSJ, Docket Entry No. 72, p. 4. See also
MSFF’s MSJ, Docket Entry No. 63, pp. 4 and 21 (citing Texas law).
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Greene v. Farmers Insurance Exchange, 446 S.W.3d 761, 765 (Tex.
2014). “Contested fact issues . . . are for the [fact finder] to
resolve, and the burden of proof is on the party seeking a remedy.”
Pathfinder, 574 S.W.3d at 890. But “[w]hether a party has breached
a contract is a question of law for the court, not a question of
fact for the jury, when the facts of the parties’ conduct are
undisputed or conclusively established.” Grohman v. Kahlig, 318
S.W.3d 882, 887 (Tex. 2010) (per curiam). See also Elmen Holdings,
L.L.C. v. Martin Marietta Materials, Inc., 86 F.4th 667, 678 (5th
Cir. 2023)(“Where the evidence is undisputed regarding a person’s
conduct under a contract, the court alone must determine whether
such conduct shows performance or breach of a contractual
obligation.”).
B. Application of the Law to the Undisputed Facts
1. WesternGeco’s Motion for Partial Summary Judgment
WesternGeco argues that it is entitled to partial summary
judgment because undisputed evidence shows that MSFF breached the
Letter Agreement by providing the Z1 Crew to ExxonMobil instead of
WesternGeco,45 without providing WesternGeco the notice required by
Article 7 of the Letter Agreement.46 WesternGeco argues that
45WesternGeco’s MPSJ, Docket Entry No. 72, p. 4.
46Id. at 6.
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under the Letter Agreement, [MSFF] agreed to provide two
levels of notice to WesternGeco concerning the
availability of the Z1 Crew during its term. First, in
the first sentence of Article 7, “[MSFF] will notify
WesternGeco within twenty-four (24) hours of [MSFF]’s
receipt and/or submission of any new and/or subsequent
tenders/expressions of interest/LOI’s/LOA’s/agreements/
etc. that might [i]mpact [MSFF GOM] crew availability.”
Second, in the second sentence of Article 7, “Without
providing customer and/or project names (to protect
client confidentiality), [MSFF] shall provide WesternGeco
with timelines and other relevant Information, including,
but not limited to, estimated contract award date,
scheduling and any changes thereto.” . . .
Because it is undisputed that [MSFF] did not provide the
Z1 Crew to WesternGeco, the second sentence of Article 7
of the Letter Agreement is at the crux of the parties’
dispute. [MSFF] contends that it did not breach the
Letter Agreement because it gave notice under “Article 7”
. . . to WesternGeco via a single sentence in a June 16,
2022 email that triggered WesternGeco’s ten business day
right of first refusal, running to June 30, 2022 (the
“June 16 Email”). It is undisputed that WesternGeco did
not enter an agreement to secure the Z1 Crew by June 30,
2022. [MSFF] thus contends that WesternGeco’s right of
first refusal had expired. WesternGeco no longer had a
right to the Z1 Crew and that it was free to give the
crew and vessel package to ExxonMobil after June 30,
2022.47
WesternGeco argues that
[e]ven if the June 16 Email may have complied with the
first sentence of Article 7, it is undisputed that the
June 16 Email contains none of the detailed information
required by the second sentence of Article 7 in order to
constitute the notice required by Article 8 to trigger
WesternGeco’s right of first refusal.48
Asserting that its “motion presents a straightforward question of
contract interpretation on undisputed facts,” WesternGeco argues
47Id. at 4-6.
48Id. at 7.
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that because the June 16th Email did not “contain information
required by the Letter Agreement to trigger the right of first
refusal — most critically, an estimated contract award date,
timelines, and scheduling,” MSFF “never provided compliant notice,
the right of first refusal was never triggered, and [MSFF] breached
when it committed the Z1 Crew to ExxonMobil.”49
MSFF responds that the court should deny WesternGeco’s motion
because the applicable standard of performance is substantial — not
actual or strict — performance,50 and because a reasonable fact
finder could conclude that MSFF substantially complied with
Article 7.51 For the reasons stated below the court agrees.
(a) The Applicable Standard of Performance is
Substantial Compliance
Asserting that its
position is that the June 16th [Email] complied with the
first sentence of Article 7 and at least substantially
complied with the second sentence, and [that] any other
‘relevant information’ was supplied during ensuing
communications, including primarily the follow-on calls
on June 17th and June 29th,”52
49Id. at 8.
50MSFF’s Opposition to WesternGeco’s MPSJ, Docket Entry No. 74,
p. 4.
51Id. at 5.
52Id. at 7 n. 9.
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MSFF argues that “[i]n diametrical opposition to the applicable
standard under Texas law, WesternGeco’s sponsored construction
would impose a strict compliance standard upon [MSFF]’s performance
under Article 7.”53 Although in response to MSFF’s MSJ, WesternGeco
acknowledges that “substantial compliance can be an appropriate
standard to evaluate whether a party complied with many contractual
notice conditions under Texas law,”54 WesternGeco’s MPSJ and reply
in support thereof argue that WesternGeco is entitled to summary
judgment on breach because “the June 16th Email plainly fails to
meet the explicit demands of Article 7.”55
“Whether a contract provision requires strict or substantial
compliance with its terms is governed by state law.” Elmen, 86
F.4th at 677-78. Under Texas law, “substantial compliance is the
appropriate standard when evaluating whether a party complied with
a contractual notice condition.” Id. at 678 (quoting James, 650
S.W.3d at 405). “The doctrine of substantial compliance excuses a
party’s deviations from a contractual requirement . . . if those
deviations do not severely impair the purpose of the requirement.”
Id. (quoting South Texas Electric Cooperative v. Dresser-Rand Co.,
Inc., 575 F.3d 504, 508 (5th Cir. 2009) (applying Texas law)). The
53Id. at 9.
54WesternGeco’s Opposition to MSFF’s MSJ, Docket Entry No. 73,
p. 25.
55WesternGeco’s Reply, Docket Entry No. 78, pp. 6, 17-18. See
also WesternGeco’s MPSJ, Docket Entry No. 72, pp. 22-27.
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doctrine of substantial compliance “serves the important purpose of
preventing parties from engaging in bad-faith ‘gotcha’ tactics to
avoid their own contractual obligations based on a technicality.”
James, 650 S.W.3d at 406. “A party substantially complies with a
notice provision when it ‘communicate[s] sufficient information to
enable [the other party] to reasonably conclude that the [notice
provision] was in play and that the . . . clock was ticking.’”
Elmen, 86 F.4th at 678 (quoting James, 650 S.W.3d at 410).
“[W]here state substantive law requires substantial compliance,
‘whether a party has substantially complied with the terms of a
contract presents a pure question of fact that the trier of fact
alone may decide.’” Id. (quoting Turrill v. Life Insurance Company
of North America, 753 F.2d 1322, 1326 (5th Cir. 1985)).
(b) WesternGeco Fails to Argue or Cite Evidence
Establishing as a Matter of Law that MSFF Did Not
Substantially Comply with Article 7’s Requirements
Citing the June 16th email exchange between Poole and Hayter,
Poole’s summary of the June 17th call that he had with Hayter, and
the subsequent emails that Poole exchanged with his superiors at
WesternGeco, MSFF argues that a reasonable fact finder could
conclude that it substantially complied with the requirements of
Article 7’s second sentence because the summary judgment evidence
shows that
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after the June 17th call, WesternGeco knew that the
operator wanting Z1 was Exxon, Exxon’s competing project
was in Guyana, Exxon’s timeslot interfered with Z1’s
availability to conduct Engagement 3 in
“August/September,” and that the nature of the “formal
correspondence” received by [MSFF] from Exxon was a
“conditional letter of intent.”56
The undisputed summary judgment evidence establishes that on
June 16, 2022, MSFF and an Exxon subsidiary executed an MOU
obligating them to negotiate a work order for use of the Z1 crew on
a project anticipated to commence in the September 2022 timeframe.57
The same day, MSFF’s Hayter emailed WesternGeco’s Poole on the
subject “Z1 Availability etc.” stating:
This afternoon (16th June 2022) we received formal
correspondence from an operator to use the Z1 XPLR crew
for a campaign immediately after the current survey.
. . .
We look forward to meeting at your convenience to discuss
further.58
Poole responded by asking “is the Z1 XPLR crew you mention here the
“Appomattox” or the “Mad Dog” crew,” to which Hayter replied, “It’s
the ‘Mad Dog’ crew.”59
56MSFF’s Opposition to WesternGeco’s MPSJ, Docket Entry No. 74,
p. 11.
57MSFF’s MSJ, Docket Entry No. 63, p. 10 & n. 17 (explaining
that “Z1 is designated here by reference to the vessels REM Saltire
and Sanco Spirit.”). See also MOU, Exhibit A-5 of MSFF Appendix,
pp. 154-59, Docket Entry No. 64-1, pp. 6-11.
58June 16, 2022, email, Exhibit G to MSFF Appendix, p. 326,
Docket Entry No. 65, p. 27.
59Id.
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Following his receipt of Hayter’s email, Poole forwarded it to
Gowans, and working together he and Gowans drafted the following
email that Poole sent to Moussa and Allen:
See below notification of crew utilization from MSFF
relative to the crew that is intended for our Engagement
3 project. Hayter indicates that an operator has
provided MSFF with “formal correspondence” to use that
crew on completion of their current BP work on the
Atlantis and Mad Dog proprietary surveys, due to finish
end of August. . .
Referencing our Agreement with MSFF, they have to notify
us within 24 hours of MSFF’s receipt of LOI/LOA. It
would appear that is what Hayter is doing in his email.
We now have first right to that crew and up to 10
business days to execute an agreement with MSFF to use
that crew, unless the terms of the LOI/LOA they received
give them less than 10 days to respond, in which case we
have the same time frame to work within. MSFF are
required to tell us what that timeframe is.
I can have a call with Hayter tomorrow morning to
understand the relevant timelines and request written
confirmation of those.60
WesternGeco does not dispute that the June 16th Email provided
the notice required by Article 7’s first sentence, but argues that
it is nevertheless entitled to summary judgment because that email
did not satisfy Article 7’s second sentence, which required MSFF to
60June 16, 2022, email, Exhibit G of MSFF Appendix, p. 325,
Docket Entry No. 65, p. 26. WesternGeco alleges that “[p]ursuant
to the Letter Agreement, [MSFF] agreed to provide written notice of
any potential engagement and to allow WesternGeco to exercise its
contractual right of first refusal.” Petition, included in
Exhibit B to Notice of Removal, Docket Entry No. 1-2, p. 8 ¶ 25.
MSFF argues that the Letter Agreement does not require any of the
information mentioned in Article 7 to be provided in writing. See
MSFF’s MSJ, Docket Entry No. 63, p. 21. WesternGeco has not cited
— and the court has not found — any provision of the Letter
Agreement that requires any of the information mentioned in Article
7 to be provided in writing.
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“provide WesternGeco with timelines and other relevant information,
including, but not limited to, estimated contract award dates,
scheduling and any changes thereto.”61 Although substantial
compliance is the appropriate standard for evaluating MSFF’s
compliance with the Letter Agreement’s notice provision,
WesternGeco neither argues nor cites evidence that it contends
establishes as a matter of law that MSFF failed to substantially
comply with Article 7’s second sentence. Instead, WesternGeco
argues in both its MPSJ and in its reply that it is entitled to
summary judgment on the issue of breach because the June 16th Email
did not provide timelines, an estimated contract award date, or
scheduling in strict compliance with Article 7’s second sentence.62
When Poole forwarded the June 16th Email to Moussa and Allen,
he explained that “Hayter indicates that an operator has provided
MSFF with ‘formal correspondence’ to use that crew on completion of
their current BP work on the Atlantis and Mad Dog proprietary
surveys, due to finish end of August.”63 A reasonable fact finder
could conclude both that MSFF provided WesternGeco with a timeline
and estimated contract award date as required by Article 7’s second
sentence. Moreover, Poole also stated that “[r]eferencing our
61Letter Agreement, p. 2, included in Exhibit B to the Notice
of Removal, Docket Entry No. 1-2, p. 163.
62See WesternGeco’s MPSJ, Docket Entry No. 72, pp. 22-27;
WesternGeco’s Reply, Docket Entry No. 78, pp. 6, 17-18.
63June 16, 2022, email, Exhibit G of MSFF Appendix, p. 325,
Docket Entry No. 65, p. 26.
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Agreement with MSFF, they have to notify us within 24 hours of
MSFF’s receipt of LOI/LOA. It would appear that is what Hayter is
doing in his email.”64 A reasonable fact finder could therefore
conclude that WesternGeco understood that the June 16th Email
triggered the Letter Agreement’s ROFR.
(c) Conclusions
Because under Texas law substantial performance is the
appropriate standard of performance for a contractual notice
provision, and because a reasonable fact finder could conclude from
the June 16th email exchanges between MSFF and WesternGeco and
between Poole and his WesternGeco superiors that MSFF substantially
complied with both sentences of the Letter Agreement’s Article 7,
and that the June 16th Email communicated sufficient information to
enable WesternGeco to reasonably conclude that the ROFR provision
was in play and the clock was ticking. See Elmen, 86 F.4th at 678
(quoting James, 650 S.W.3d at 410) (“A party substantially complies
with a notice provision when it ‘communicate[s] sufficient
information to enable [the other party] to reasonably conclude that
the [notice provision] was in play and that the . . . clock was
ticking.’”). The court therefore concludes that WesternGeco has
failed to establish entitlement to summary judgment on the issue of
breach. WesternGeco’s MPSJ will be denied.
64Id.
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2. MSFF's Motion for Summary Judgment
MSFF argues that it is entitled to summary judgment because
WesternGeco is unable to establish either that MSFF breached the
Letter Agreement or that WesternGeco suffered damages caused by any
such breach.65 MSFF argues that it is entitled to summary judgment
on the issue of breach because the notification it provided to
WesternGeco on June 16, 2022, “substantially complied with the
notice provision by conveying sufficient information to alert
WesternGeco that the [ROFR] provision was in play and that the ten-
business-day period had commenced.”66 MSFF argues that it is
entitled to summary judgment on the issue of causation because
“[t]he summary judgment evidence conclusively demonstrates that any
increased costs to WesternGeco were not the result of some
technical flaw in [MSFF]’s notice but, instead, stem from
WesternGeco’s lack of readiness during the option period.”67
WesternGeco responds that the court should deny MSFF’s MSJ
because “WesternGeco should prevail on its contemporaneously filed
[MPSJ],”68 and because MSFF’s arguments all “depend on facts outside
the Letter Agreement.”69
65MSFF’s MSJ, Docket Entry No. 63, pp. 6 and 21.
66Id. at 24.
67Id. at 26.
68WesternGeco’s Opposition to MSFF’s MSJ, Docket Entry No. 73,
p. 5. See also id. at 16-17. For the reasons stated in § III.B.1,
the court has already decided to deny WesternGeco’s MPSJ.
69Id. at 5. See also id. at 17-26.
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(a) The Undisputed Summary Judgment Evidence
Establishes that MSFF Substantially Complied with
the Letter Agreement’s Notice Provision
Citing the June 16th email exchange between Poole and Hayter,
and the emails that Poole shared with his superiors at WesternGeco
on June 16th and 17th, MSFF argues that “[t]he [c]ourt should grant
summary judgment because [it] substantially complied with its
notice obligation under the Letter Agreement.”70 MSFF argues that
this evidence establishes that it substantially complied with its
notice obligation because it shows that “[o]n June 16, 2022, [MSFF]
disclosed by email the competing interest in Z1 immediately after
its current project and suggested a call to discuss,”71 “WesternGeco
understood the notification was provided under Article 7 of the
Letter Agreement and that receipt started the ten-business-day
clock,”72 and that “[d]uring the June 17th follow-up call,
WesternGeco learned — at a minimum — that [MSFF] had a ‘conditional
letter of intent’ for Exxon’s Guyana Project for the same
August/September time slot as Engagement 3.”73 MSFF also cites
evidence showing that
[w]ithin the ten-business-day period, [MSFF] informed
WesternGeco that: (i) [MSFF] had received signed
documentation requesting Z1 immediately following its
70MSFF’s MSJ, Docket Entry No. 63, p. 23.
71Id. at 22.
72Id.
73Id. at 22-23.
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current project; (ii) that Exxon was progressing the
contract; and (iii) that [MSFF] expected that WesternGeco
would not secure Z1 because the ten business days were
almost up.74
WesternGeco responds that the court should deny MSFF’s MSJ
because MSFF’s “[m]otion asks the court to look past the June 16
Email and rely on extra-contractual facts and post hoc arguments.”75
Asserting that the extra-contractual evidence is irrelevant and
disputed, WesternGeco argues that even if the court chooses to
consider WesternGeco’s internal emails from June 16th, “they are
actually consistent with the fact that MSFF’s June 16 Email is not
adequate notice under the Letter Agreement,”76 because WesternGeco’s
“witnesses testified that they were confused by the June 16 Email,
not that its employees understood the ten-day clock had started.”77
The undisputed evidence establishes that on June 16, 2022,
MSFF and an Exxon subsidiary executed an MOU obligating them to
negotiate a work order for use of the Z1 crew on a project
anticipated to commence in the September 2022 timeframe.78 That
74Id. at 23.
75WesternGeco’s Opposition to MSFF’s MSJ, Docket Entry No. 73,
p. 6. See also id. at 17-26.
76Id. at 18.
77Id. at 20.
78MSFF’s MSJ, Docket Entry No. 63, p. 10 & n. 17 (explaining
that “Z1 is designated here by reference to the vessels REM Saltire
and Sanco Spirit.”). See also MOU, Exhibit A-5 of MSFF Appendix,
pp. 154-59, Docket Entry No. 64-1, pp. 6-11.
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same day, MSFF’s Hayter emailed WesternGeco’s Poole regarding “Z1
Availability etc.” stating:
This afternoon (16th June 2022) we received formal
correspondence from an operator to use the Z1 XPLR crew
for a campaign immediately after the current survey.
. . .
We look forward to meeting at your convenience to discuss
further.79
Poole responded by asking “is the Z1 XPLR crew you mention here the
‘Appomattox’ or the ‘Mad Dog’ crew,” to which Hayter replied, “It’s
the ‘Mad Dog’ crew.”80
Poole forwarded the June 16th Email to Gowans, and together
they drafted the following email that Poole sent to Moussa and
Allen:
See below notification of crew utilization from MSFF
relative to the crew that is intended for our Engagement
3 project. Hayter indicates that an operator has
provided MSFF with “formal correspondence” to use that
crew on completion of their current BP work on the
Atlantis and Mad Dog proprietary surveys, due to finish
end of August . . .
Referencing our Agreement with MSFF, they have to notify
us within 24 hours of MSFF’s receipt of LOI/LOA. It
would appear that is what Hayter is doing in his email.
We now have first right to that crew and up to 10
business days to execute an agreement with MSFF to use
that crew, unless the terms of the LOI/LOA they received
give them less than 10 days to respond, in which case we
79June 16, 2022, email, Exhibit G to MSFF Appendix, p. 326,
Docket Entry No. 65, p. 27.
80Id.
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have the same time frame to work within. MSFF are
required to tell us what that timeframe is.
I can have a call with Hayter tomorrow morning to
understand the relevant timelines and request written
confirmation of those.81
Although not included in the above quoted email that was sent
to Moussa and Allen, the following references to the Letter
Agreement were made in a color-coded draft of the email created by
Poole and Gowans:
Referencing our Letter Agreement with MSFF, the below
points are relevant .....
Article 7: “MSFF will notify WG within 24 hours of MSFF’s
receipt of LOI/LOA etc”. I assume Simon’s notification
is in accordance with this.
Article 7: “MSFF will provide WG with timelines and other
relevant info including estimated contract award date
relative to any such LOI/LOA’s received”. We should ask
MSFF for the LOI/LOA timelines and expected contract
award date and timelines.
Article 8: “Upon receipt of notification from MSFF (as
per Article 7), WG shall have 10 business days to execute
a written agreement with MSFF”. WG should have 10
business days to secure the crew unless ......
“Should MSFF not be able to grant WG 10 business days due
to terms agreed prior to execution date of the
WesternGeco Letter Agreement and/or future tenders, then
MSFF shall provide WG with the acceptance timeline and WG
can execute a written agreement within the same
timeline”. If the operator talking to [MSFF] is Equinor,
Shell or BP there may be existing terms from before our
agreement that mean [MSFF] don’t have to give us a[s]
much as 10 days to execute a contract with them.
However, if it’s new work, e.g. XOM Guyana, they should
81June 16, 2022, email, Exhibit G of MSFF Appendix, p. 325,
Docket Entry No. 65, p. 26.
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have to give us the full 10 business days. But they do
have to tell us what that timeline is.82
On June 17, 2022, Poole spoke with Hayter and summarized their
discussion in the following email to Allen and Gowans:
It appears it is Exxon who are trying to secure this crew
from MSFF for a campaign in Guyana. MSFF have some sort
of conditional letter of intent in their hands. They are
unsure whether Exxon will realistically be in a position
to commence work in the Aug/Sep timeframe, so there is
possibly a window for us to start Engagement 3
acquisition at that time if Exxon are not ready. MSFF
are expecting to discuss with Exxon on Monday about what
“it” is and when.83
On June 21, 2022, Hayter emailed Poole stating:
Things have progressed since we spoke on Friday. The
company I referred to below has now provided signed
documentation requesting the Z1 XPLR crew immediately
following Mad Dog.84
On June 23, 2022, Hayter sent another email to Poole writing
in pertinent part, “[a]s stated in my recent emails, paperwork has
been received for the crew immediately following Mad Dog. . .85
Poole responded: “Thanks for the update. We’re still focused on
the ZXPLR crew and would like to get the Engagement 3 Work Order
82June 16, 2022, email, Exhibit H of MSFF Appendix, p. 329,
Docket Entry No. 65, p. 30.
83June 17, 2022, email (RE: [Ext] Z1 Availability etc.),
Exhibit J of MSFF Appendix, p. 397, Docket Entry No. 65, p. 98.
84June 21, 2022, email (RE: Z1 Availability etc.), Exhibit A-6
of MSFF Appendix, p. 161, Docket Entry No. 64-1, p. 13.
85June 23, 2022, email (RE Engagement 3 price estimate),
Exhibit P of MSFF Appendix, p. 525, Docket Entry No. 66, p. 26.
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prepared (to include a mutually agreed termination clause, so we
can secure the crew unconditionally). . .”86
On June 29, 2022, Poole met with Hayter and other MSFF
personnel. In pertinent part, Poole summarized the meeting in an
email to Gowans and Allen that was copied to Moussa:
! Hayter said they are progressing towards a contract
with Company X. He said he is assuming they will
not have a contract with us as it is nearly 10
business days since he let us know that they had
paperwork from company X. . . I see little in the
way of intention to giving us any priority.
! I told Hayter that our intention was to be in a
position to finalize a contract, which is why we
were getting their cost estimates.
! Company X are saying they are ready to start
acquisition in September, MSFF are a bit less sure
of X’s readiness, but continuing to take them at
their word.
! At the end, Hayter asked whether we could send them
a draft Service Order.
Can discuss tomorrow.87
Allen responded almost immediately stating in pertinent part: “As
expected, [Hayter] now stating 10 days is triggered and backdated
to his first notification of receiving ‘paperwork.’”88
86Id.
87June 30, 2022, email (Magseis meeting today), Exhibit R of
MSFF Appendix, p. 534, Docket Entry No. 66, p. 35. The date of the
email is June 30th instead of June 29th because it was sent just
after midnight.
88Id.
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On June 30, 2022, WesternGeco debated internally whether to
ask MSFF for a “formal clock” on the 10-business day ROFR period.
Poole exchanged text messages with Allen agreeing that they should
ask MSFF for a “formal clock,” but deferred the decision to
Gowans.89 That evening Poole emailed Allen the following:
Sat down with [Gowans] and we decided that there’s no
point in [Moussa] talking to [Hooijkaas]. I will
continue to push [Hayter] for cost numbers in the
meantime.
If we ask him for a formal clock I imagine they will say
it started 10 days ago. If we don’t ask, then there’s
still an argument to say we never had a formal
notification. There’s no great option.90
Allen responded, “Ok thanks Gary. Don’t they need to provide
evidence? Or they can just verbally say clock started? Surely we
put something in [t]he agreement?”91
The June 16th email that Poole and Gowan drafted for Moussa
and Allen, and the email that Poole actually sent to Moussa and
Allen, demonstrate that WesternGeco understood the June 16th Email
from Hayter to Poole as notice sent pursuant to Article 7 of the
Letter Agreement that a competitor sought to secure the Z1 Crew at
the end of August, that MSFF’s June 16th Email triggered Article
89Poole-Allen June 30, 2022, text messages, Exhibit EE of MSFF
Appendix, pp. 689-90, Docket Entry No. 67, pp. 90-91.
90June 30, 2022, email (MSFF end of day), Exhibit S of MSFF
Appendix, p. 537, Docket Entry No. 66, p. 38.
91July 1, 2022, email (Re: MSFF end of day), Exhibit S of MSFF
Appendix, p. 537, Docket Entry No. 66, p. 38.
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8’s ROFR period, and that WesternGeco had up to ten business days
to execute a written agreement to secure the Z1 Crew. These emails
also establish that WesternGeco’s only confusion was whether the
competitor was an operator that had an existing agreement with
MSFF, such as Equinor, Shell, or BP, in which case WesternGeco
could have less than ten business days to secure the Z1 Crew; or
whether the competitor represented new work, e.g., ExxonMobil, in
which case WesternGeco would have the full ten business days.
Poole’s email summarizing his June 17th call with Hayter confirmed
that the competitor was Exxon, that Exxon’s time slot would
interfere with Z1’s availability to conduct Engagement 3 in
August/September, and that the nature of the formal correspondence
received by MSFF from Exxon was a conditional letter of intent.92
The subsequent emails from June 21st, June 23rd, June 29th, and
June 30th demonstrate that throughout the ten-business-day ROFR
period that followed MSFF’s June 16th Email, MSFF continued to
provide WesternGeco “other relevant information” as required by
Article 7. The details disclosed by MSFF to WesternGeco on June
16th and that WesternGeco understood to trigger the Letter
Agreement’s ten-business-days ROFR period, establish that MSFF
substantially complied with the Letter Agreement’s notice provision
on June 16, 2022. See Elmen, 86 F.4th at 678 (quoting James, 650
92June 17, 2022, email (RE: [Ext] Z1 Availability etc.),
Exhibit J of MSFF Appendix, p. 397, Docket Entry No. 65, p. 98.
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S.W.3d at 410)(“A party substantially complies with a notice
provision when it ‘communicate[s] sufficient information to enable
[the other party] to reasonably conclude that the [provision] was
in play and that the . . . clock was ticking.’”)).
(b) WesternGeco Fails to Cite Evidence that Raises a
Genuine Issue of Material Fact for Trial
Although whether a party has substantially complied with the
terms of the contract is a question of fact, id., and factual
controversies are resolved in favor of the nonmovant, these
principles only apply when there is an actual controversy, that is,
when both parties have submitted evidence of contradictory facts.
Little, 37 F.3d at 1075. WesternGeco’s opposition to MSFF’s MSJ
lists a number of factual disputes that it argues present genuine
issues of material fact for trial,93 but the court is not persuaded
that any of the disputes listed in WesternGeco’s opposition are
disputes that if resolved in WesternGeco’s favor would allow a
reasonable fact finder to conclude that MSFF did not substantially
comply with the Letter Agreement’s notice provision. For example,
citing deposition testimony of WesternGeco and MSFF employees,
WesternGeco argues that a genuine issue of material fact exists as
to whether MSFF ever told WesternGeco that the ten-day ROFR period
had started. This issue does not present a genuine issue of
93WesternGeco’s Opposition to MSFF’s MSJ, Docket Entry No. 73,
pp. 8-14.
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material fact for trial because the Letter Agreement obligated MSFF
to notify WesternGeco of new and/or subsequent offers from other
customers; it did not obligate MSFF to notify WesternGeco that the
ROFR period had started. Therefore a dispute about whether MSFF
told WesternGeco that “the clock was ticking” is not a genuine
issue of material fact for trial.
Citing James, 650 S.W.3d at 405, for stating that “a party has
not substantially complied if their deviations from the express
contract terms ‘severely impair the purpose of the requirement,”94
WesternGeco argues that “[w]hether the purpose [of the Letter
Agreement’s notice provision] was ‘severely impaired’ is a fact
question for the [c]ourt to resolve at trial.”95 WesternGeco argues
that it “has presented substantial evidence that [MSFF’s] omissions
deprived it of the information it needed to evaluate and act on its
rights.”96 But instead of citing evidence in support of this
argument, WesternGeco merely argues that MSFF’s
omissions were not technical, inconsequential defects to
its notice — they were wholesale. . . [MSFF] provided no
estimated contract award date, no timelines, and no
scheduling information. Omitting the entire substance of
Article 7’s second sentence is not a minor deviation
because it eliminates the mechanism by which WesternGeco
could evaluate whether and how to exercise its [ROFR].97
94Id. at 25.
95Id.
96Id.
97Id.
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WesternGeco does not cite any evidence that would allow a
reasonable fact finder to conclude that the notice it received on
June 16th that a competitor sought to engage the Z1 Crew in the
August/September timeframe, which was the timeframe that
WesternGeco planned to engage the Z1 Crew for Engagement 3, was not
sufficient for it to evaluate whether and how to exercise its ROFR.
Contrary to WesternGeco’s argument that substantial compliance
is inapplicable to the facts of this case, the Texas Supreme Court
has held that the doctrine of substantial compliance is a “general
principle of Texas law,” James, 650 S.W.3d at 406, and the Fifth
Circuit has held that “[t]he doctrine of substantial compliance
excuses a party’s deviations from a contractual requirement . . .
if those deviations do not severely impair the purpose of the
requirement.” Elmen, 86 F.4th at 678 (quoting South Texas
Electric, 575 F.3d at 508 (applying Texas law)). In Elmen the
Fifth Circuit also held that “[a] party substantially complies with
a notice provision when it ‘communicate[s] sufficient information
to enable [the other party] to reasonably conclude that the
[provision] was in play and that the . . . clock was ticking,’”
Id. (quoting James, 650 S.W.3d at 410). The Elmen court also held
that “[w]here the evidence is undisputed regarding a person’s
conduct under a contract, the court alone must determine whether
such conduct shows performance or breach of a contractual
obligation.” Id. at 677-78.
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(c) Conclusions
Because under Texas law substantial performance is the
appropriate standard of performance for a contractual notice
provision, because MSFF has cited evidence demonstrating that on
June 16th MSFF “‘communicate[d] sufficient information to enable
[WesternGeco] to reasonably conclude that the [ROFR provision] was
in play and that the . . . clock was ticking,’” Elmen, 86 F.4th at
678 (quoting James, 650 S.W.3d at 410), and because WesternGeco has
failed to cite evidence from which a reasonable fact finder could
conclude that the deviations from the express contract terms of
which WesternGeco complains, i.e., the failure to disclose specific
timelines and an estimated contract award date, severely impaired
the purpose of the Letter Agreement’s notice provision, the court
concludes that MSFF is entitled to summary judgment because it has
established as a matter of law that it substantially complied with
the Letter Agreement’s notice provision. Therefore, MSFF’s MSJ
will be granted.
IV. Conclusions and Order
For the reasons stated in § III.B.1, above, the court
concludes that WesternGeco has failed to establish entitlement to
summary judgment on the issue of breach. Therefore, Plaintiff
WesternGeco, LLC’s Motion for Partial Summary Judgment, Docket
Entry No. 72, is DENIED.
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For the reasons stated in § III.B.2, above, the court
concludes that MSFF has established entitlement to summary judgment
on the issue of breach. Therefore, Defendant Magseis FF L.L.C.'s
Motion for Summary Judgment, Docket Entry No. 63, is GRANTED.
SIGNED at Houston, Texas, on this 20th day of July, 2026.
SIM LAKE
SENIOR UNITED STATES DISTRICT JUDGE
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