Free Answer to Amended Complaint - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv-0051-REB-CBS SCOTT A. CUNNINGHAM, Plaintiff, v. BHP BILLITON PETROLEUM GREAT BRITAIN LIMITED, a United Kingdom private limited company, BHP PETROLEUM GREAT BRITAIN PLC, a United Kingdom limited company, BHP PETROLEUM (U.K.) CORPORATION, a Delaware corporation, and HAMILTON BROTHERS PETROLEUM CORPORATION, a Delaware corporation, Defendants. D F N A T ' N WE TO AMENDED COMPLAINT AND DEFENSES E E D N SA S R

Defendants BHP Billiton Petroleum Great Britain Limited, formerly known as BHP Petroleum Great Britain PLC, BHP Petroleum (U.K.) Corporation, and Hamilton Brothers Petroleum Corporation answer and respond to pln fs" a tf Amended Complaint and Jury i i' D m n"" e ad ( Amended Compla t , dated June 3, 2005, as follows: i" n) ANSWER I. PARTIES AND JURISDICTION 1. Plaintiff Scott Cunningham is a former employee of one or both of the predecessors of Defendants BHP Petroleum G etBii p ( H G etBritain" ad r a ra l " P r tn c B a )n Defendant BHP Petroleum (U.K.) C roao ( H PtorpUK" adhl opr i " P e tn B C .., n o san interest ) d relative to certain petroleum licenses at issue in this case. Mr. Cunningham resides in, is a citizen of, and is domiciled in, Colorado.

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RESPONSE:

Admitted, upon information and belief, that plaintiff Scott A. Cunningham

resides in, is a citizen of, and is domiciled in, Colorado. Otherwise, denied. 2. Defendant BHP Billiton Petroleum Great Britai Lm t ( H Blt " is a n i id " P ii n) e B lo United Kingdom private limited company located in London, England, and upon information and belief, is the successor in interest (through merger or acquisition) and/or the same company (via name change) as BHP Great Britain. BHP Billiton and BHP Great Britain will be referred to clcvlhr n s B PG et ra " BHP Great Britain is a citizen of England. o et e e i a " H r Bii . l i y e a tn RESPONSE: Admitted that BHP Billiton Petroleum Great Britain Limited is a private limited company with a location in London, England and was once named BHP Petroleum Great Britain PLC. Otherwise, denied. 3. Defendant BHP Great Britain is or was a United Kingdom public limited company located in London, England, and, upon information and belief, is the successor to certain companies at issue in this case, including, without limitation, public companies known as H m l n Bo e Pt l m C roao ( e op) H m l n Bo e E a io rt r e o u t hs re opr i " t r" tn P C , a io rt r xploration t hs C m ay " x o)ad a io Ol r t ra plc ( O B ) o pn ( C " n H m l n iG e Bii E , t a tn " G" H . RESPONSE: Admitted that BHP Petroleum Great Britain PLC was a public limited company with a location in London, England, and that BHP Petroleum Great Britain PLC was once known as Hamilton Oil Great Britain PLC. Otherwise, denied. 4. Defendant BHP PetCorp U.K. is a Delaware corporation and is the successor to certain companies involved in this case, including, without limitation, Hamilton Brothers (U.K.) Pt l m C roao ( B UK PetCorp" Defendant BHP PetCorp U.K. is a citizen of e o u opr i " re tn H .. ). Delaware and England. RESPONSE: Admitted that defendant BHP Petroleum U.K. Corporation is a Delaware

corporation, has succeeded to certain obligations of Hamilton Brothers U.K. Petroleum Corporation, and, for purposes of 28 U.S.C. § 1332, is deemed a citizen of the State of Delaware. Otherwise, denied. 5. Defendant PetCorp is a Delaware corporation with its principal place of business in the State of Texas. Defendant PetCorp is a citizen of Delaware and Texas.

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RESPONSE: Admitted that Hamilton Brothers Petroleum Corporation is incorporated in a Delaware, has its principal place of business in Texas, and for purposes of 28 U.S.C. § 1332, is deemed to be a citizen of the States of Delaware and Texas. Otherwise, denied. 6. This Court has personal jurisdiction over Defendants pursuant to the United States Constitution, as PetCorp (upon information and belief, DefenatB P G etBii s dn H r a ra ' tn predecessor in interest) was a Colorado corporation that for many years had its principal business in Colorado. Furthermore, BHP PetCorp U.K.' predecessor, HB U.K. PetCorp, conducted s significant business in Colorado. RESPONSE: Admitted that Hamilton Brothers Petroleum Corporation was headquartered in Colorado many years ago. Otherwise, denied. 7. This Court has subject matter jurisdiction over the instant dispute pursuant to 28 U.S.C. § 1332 because Plaintiff is of diverse citizenship from all Defendants and the matter in controversy exceeds the sum of $75,000, exclusive of interest and costs, as against each Defendant. RESPONSE: Upon information and belief, admitted that there is complete diversity between the named plaintiff and named defendants, and that the matter in controversy exceeds the sum of $75,000.

II. FACTUAL ALLEGATIONS 8. The predecessor companies of Defendants BHP Great Britain and BHP PetCorp U.K. were part of a group of companies under the common control of a company called H m l nBo e Ol o pn ( a io rt r iC m ay " t hs HBOC" and/or its owners Frederic Hamilton and Ferris ) Hamilton. This group of companies is referred to herein as the " Hamilton Companies. T e " h H m l nC m ai 'headquarters were in Denver, Colorado, and the senior management a io o pn s t e officers for all of the Companies were located in Denver. RESPONSE: The allegations are too vague for defendants to respond, and are not well-pleaded allegations of fact. Therefore, no response is required. If one is, the allegations are so vague and ambiguous that defendants lack knowledge and/or information sufficient to form a belief as to the truth of such allegations, and therefore deny them. Without accepting the characterizations

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of the Amended Complaint, these defendants state: At points of time in the past, there were various entities in the oil and gas business bearing the Hamilton name, at least some of which were headquartered in Denver. 9. Mr. Cunningham is a former employee, officer, and/or director of certain of the Hamilton Companies. Defendants BHP Great Britain and BHP PetCorp U.K. are two companies that have succeeded to the interests of certain Hamilton Companies and are now direct or indirect subsidiaries of the Broken Hill Proprietary Company, the parent of a conglomerate of hundreds of petroleum and mineral companies that are in the business of exploring for and operating oil and gas and mining interests worldwide. RESPONSE: Admitted that Mr. Cunningham was an officer and director of Hamilton

International Oil Company, which transferred certain assets and obligations to a company then called Hamilton Oil Great Britain PLC, which is now known as BHP Billiton Petroleum Great Britain Limited. The remaining allegations of paragraph 9 of the Amended Complaint are too vague for defendants to respond, and are not well-pleaded allegations of fact. Therefore, no response is required. If one is, the remaining allegations are so vague and ambiguous that defendants lack knowledge and/or information sufficient to form a belief as to the truth of such allegations, and therefore deny them. 10. Mr. Cunningham'claims herein originate, in part, from an employee benefit plan s created by Defendant PetCorp as a means of attracting and retaining employees for all the affiliated Hamilton Companies. One of the features of the plan was to grant key employees a right to participate in the production from the Hamilton Companies' and gas properties. The oil Board of Directors of PetCorp took action to adopt this employee benefit plan several decades ago. On January 13, 1970, the Board of Directors of PetCorp approved this Key Employee Incentive Plan (" PetCorp Plan" This plan granted key employees an opportunity to receive net ). profits interests, or similar interests, relative to certain petroleum properties owned by Defendants' predecessors and their affiliates. RESPONSE: Admitted that on or about January 13, 1970, the Board of Directors of Hamilton Brothers Petroleum Corporation adp d ap n cld a" e E ployee Incentive Plan" ot e l ae a l Ky m Otherwise, denied.

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11.

ExCo adopted a similar plan on June 14, 1974 (" x o l " E C Pa ). n

RESPONSE: Admitted that on or about June 14, 1974, the shareholders of Hamilton Brothers Exploration Company approved ap nclda" e E p yeIcn v Pa. O l ae a l K y m l e net e l " therwise, o i n denied. 12. Pursuant to the PetCorp Plan, on July 1, 1971, PetCorp assigned to Frederic C. Hamilton, as Key Employee Incentive Plan Trustee, an undivided 10% interest relative to the oil and gas properties acquired by PetCorp and accounted for in e ops 91 con n U i Pt r'17 A cut g n . C i t RESPONSE: Admitted only that Hamilton Brothers Petroleum Corporation and Frederic C. Hamilton executed a certain written assignment, which speaks for itself. Otherwise, denied. 13. Mr. Hamilton subsequently assigned his interest to various beneficiaries of the PetCorp Plan. One of these beneficiaries was Mr. Cunningham, who received a 1.2842% carried working interest (" 1971 CWI" in and to all oil and gas properties owned or held in trust for ) certain principals by the following Hamilton Companies: HBOC, PetCorp, Hamilton Brothers Incorporated, HB U.K. PetCorp, and Hamilton Brothers Canadian Gas Company, Ltd. These properties were to be accounted for in PetCorp'1971 Accounting Unit. s RESPONSE: Admitted only that Frederic C. Hamilton and Scott A. Cunningham executed a certain written assignment, which speaks for itself. Otherwise, denied. 14. Mr. Cunningham' 1971 CWI assignment also provides, among many other s things, that Mr. Cunningham assigns, transfers and sets over all of his right, title, and interest derived thereunder to a purported partnership known as Hamilton Brothers Associates (" HBA" ). RESPONSE: Admitted only that Frederic C. Hamilton and Scott A. Cunningham executed a certain written assignment, which speaks for itself. Otherwise, denied. 15. HBA, although purporting to be a partnership, is not now and never was a partnership, because it never was an association carrying on a business for profit. RESPONSE: Denied. 16. Rather, HBA is an unincorporated association of individuals.

RESPONSE: Denied.

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17. HBA' sole function is to act as nominee for its members to hold bare title to s certain interests and to receive, administer, and distribute payments related thereto. RESPONSE: Denied. 18. The properties accounted for under the 1971 Accounting Unit are United Kingdom petroleum licenses P.059, P.200, and P.209. Of these, the property at issue in this lawsuit is Block 9/8a of License P.209. RESPONSE: The allegations are too vague for defendants to respond, and therefore defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 18, and therefore deny them. 19. License P.209 was granted by the United Kingdom Secretary of State for Trade and Industry on July 10, 1972, to Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, The Rio Tinto-Zinc Corporation Limited, Blackfriars Oil Company Limited, and the Trans-European Company Limited. RESPONSE: Admitted. 20. Hamilton Brothers Exploration (U.K.) Limited subsequently also acquired an interest in License P.209. Until Hamilton Brothers Exploration (U.K.) Limited acquired its interest, such interest was held by Hamilton Brothers Petroleum (U.K.) Limited, and/or Hamilton Brothers Oil Company (Great Britain) Limited. RESPONSE: Admitted that Hamilton Brothers Exploration U.K. Limited became a licensee with respect to License P. 209. Otherwise, denied. 21. The Hamilton Entities always intended that the beneficial interests in the license interests held by Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, and Hamilton Brothers Exploration (U.K.) Limited would be held by other Hamilton Entities, and thereby the license interest and the beneficial interest would be split between various Hamilton Entities. RESPONSE: T e lgt n, a i l l t pr e h " a io E ti a asn ne, h aeaosprc a y h ha t H m l n n ts l y i edd l i tu r e s e t ie w t " are too vague for defendants to respond, and therefore defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 21, and therefore deny them.

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22. In March 1973, the Hamilton Entities formed Hamilton Brothers Oil Company 17 S a. t .t " i id" frh ot sible purpose of holding the beneficial interest in 91 dd Ld ( e Lm t a)o t s n a h a e e P.209 relative to which the license interest was held by Hamilton Brothers Oil Company (Great Britain) Limited. Significantly, however, the Limitada had not been formed at the point in time Hamilton Brothers Oil Company (Great Britain) Limited acquired its license interest in P.209. Additionally, the Limitada had not been formed at the time Mr. Cunningham received his 1971 CWI. RESPONSE: Admitted that Hamilton Brothers Oil Company 1971 Sdad. Ltda. was organized in March 1973, after license P. 209 was made, and after the written assignments referred to in paragraphs 12 and 13 were executed. Otherwise, denied. 23. Similarly, neither Hamilton Brothers Exploration (U.K.) Limited nor Hamilton Brothers U.K. Exploration Company ( ..E C " hd be fr e a t t e Mr " K x o) a en om d t h i U e m . Cunningham received his 1971 CWI. Further, neither Hamilton Brothers Exploration (U.K.) Limited nor U.K. ExCo acquired an interest in P.209 at the time it was granted. RESPONSE: Defendants lack knowledge or information sufficient to form a belief as to the truth of the allegation of paragraph 23, and therefore deny them. 24. All of the Hamilton Entities shared, in varying degrees, common control and management. RESPONSE: The allegations are too vague for defendants to respond, and therefore defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 24, and therefore deny them. 25. Immediately, prior to January 31, 1977, the beneficial interest in P.209 held by the Limitada was 33.5%, the beneficial interest held by HB U.K. PetCorp was 9.0%, and the beneficial interest held by U.K. ExCo was 7.5%. RESPONSE: Admitted. 26. On or about January 31, 1977, Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, Hamilton Brothers Exploration (U.K.) Limited, the Limitada, U.K. ExCo, and HB U.K. PetCorp entered into a Farmout Agreement with BP Petroleum Development Limited (" ), whereby BP acquired a 30.33333% interest in BP" P.209, adh Lm t a interest was reduced to 22.33333%. n t i id' e a s

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RESPONSE: Admitted that Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, Hamilton Brothers Exploration (U.K.) Limited, Hamilton Brothers Oil Company (1971) Sdad. Ltda., Hamilton Brothers U.K. Exploration Company and Hamilton Brothers U.K. Petroleum Corporation entered into a Farmout Agreement with BP Petroleum Development Limited, which speaks for itself. Otherwise, denied. 27. I 18, usatoH G ' aqit no ao e H m l nE ty H G n 93 pr n t O Bs cu io f nt r a io n t O B u si h t i, acquired the beneficial ownership of the Limitada. HOGB was the same company (by virtue of a name change) as Hamilton Brothers Oil Company (Great Britain) Limited. Notwithstanding that HOGB then owned the P.209 license interest and the beneficial interest in the Limitada, the Limitada continued to act as a beneficial owner of a P.209 license interest. RESPONSE: Admitted that in 1983, Hamilton Oil Great Britain Ltd. acquired the assets of certain entities which included quotas of the Limitada, that Hamilton Oil Great Britain Ltd. had once been named Hamilton Brothers Oil Company (Great Britain) Limited, and that after March 1983 the Limitada continued to be a party to an illustrative agreement concerning P.209. Otherwise, denied. 28 On December 31, 1984, U.K. ExCo merged into HB U.K. PetCorp, with the surviving company named HB U.K. PetCorp. After said merger, HB U.K. PetCorp owned all assets previously owned by U.K. ExCo. Thus, after said merger, the Hamilton C m ai ' o pn s e respective interests in P.209 were a 22.33333% interest for the Limitada and a 14.00000% interest for HB U.K. PetCorp. RESPONSE: Admitted that on or about December 31, 1984, Hamilton Brothers U.K.

Exploration Company merged with Hamilton Brothers U.K. Petroleum Corporation and that Hamilton Brothers U.K. Petroleum Corporation was the surviving corporation. denied. 29. On December 17, 1986, HB U.K. PetCorp sold its 14.00000% beneficial interest in P.209 to HOGB. Otherwise,

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RESPONSE: Admitted that on or about December 17, 1986 certain parties including Hamilton Brothers U.K. Petroleum Corporation and Hamilton Oil Great Britain PLC entered into a Sales and Purchase Agreement, which speaks for itself. Otherwise, denied. 30. On January 19, 1988, the Limitada and HOGB executed a Farmout Agreement, whereby the Limitada transferred to HOGB a 7.33333% interest in P.209, leaving the Limitada with a 15.33333% interest therein and giving HOGB a 21.33333% interest therein. RESPONSE: Admitted that on or about January 19, 1998, Hamilton Brothers Oil Company (1971) Sdad. Ltda. and Hamilton Brothers Oil Great Britain PLC enter i oa"a -Out e n d t Fr m A r m n" ge et which speaks for itself. Otherwise, denied. e , 31. By Novation Agreement dated June 28, 1990, the Limitada purported to assign all of its right, title, and interest in P.209 to HOGB, thereby giving the appearance that HOGB only then acquired a 36.33333% interest in P.209, when in fact HOGB had owned the legal and beneficial interest in P.209 since at least 1983. RESPONSE: Admitted that on or about June 28, 1990, Hamilton Brothers Oil Company (1971) Sdad. Ltda., Hamilton Brothers Oil Great Britain PLC and certain other parties entered into a Novation and Supplemental Agreement, which speaks for itself. Otherwise, denied. 32. Subsequently, HOGB was acquired by, and became a wholly owned, indirect subsidiary of, the Broken Hill Proprietary Company (" Broken Hill" After said acquisition ). HOGB changed its name to BHP - Hamilton Oil Great Britain plc. RESPONSE: Admitted that Hamilton Oil Great Britain PLC changed its name to BHP-

Hamilton Oil Great Britain PLC. Otherwise, denied. 33. That company' name was thereafter changed to BHP Petroleum Great Britain s plc, and thereafter to BHP Petroleum Great Britain Limited. Subsequently, Broken Hill merged with a company known as Billiton, and BHP Petroleum Great Britain Limited then changed its name to BHP Billiton Petroleum Great Britain Limited.

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RESPONSE: Admitted that BHP-Hamilton Oil Great Britain PLC changed its name to BHP Petroleum Great Britain PLC, then to BHP Petroleum Great Britain Limited, and then to BHP Billiton Petroleum Great Britain Limited. Otherwise, denied. 34. On January 1, 1988, PetCorp, HBA, HOGB, and HB U.K. PetCorp entered into a Net Profits Agreement, which essentially restated the 1971 CWI Mr. Cunningham received from PetCorp in 1971. The stated purpose of the Net Profits Agreement is to " reconstitute the earlier assignments in order to bring them into compliance with the approved Plan." RESPONSE: Admitted that on or about January 1, 1988, Hamilton Brothers Petroleum

Corporation and Hamilton Brothers Associates entered into a certain written agreement, which speaks for itself. Otherwise, denied. 35. In the Net Profits Agreement, PetCorp assumes the obligation to make the payments contemplated under the original 1971 CWI assignment. The Net Profits Agreement further stated that " relationship of [HBA] to PetCorp shall be that of creditor to debtor, and The associates shall not have nor shall associates be construed to have any interest in the properties, the production therefrom or the proceeds from sale of production therefrom. [HBA] shall only be entitled to payment from the general corporate assets of PetCorp of amounts determined by reference to the Net Profits from the properties as set forth herein." RESPONSE: Admitted that on or about January 1, 1988, Hamilton Brothers Petroleum

Corporation and Hamilton Brothers Associates entered into a written agreement, which speaks for itself. Otherwise, denied. 36. P.209 reached Payout in 2001. At that time, Defendants began making payments to Mr. Cunningham on account of his 1971 CWI. RESPONSE: Denied. 37. Instead of making payments on account of the interest in P.209 owned or held in trust by the Hamilton Companies at the time the 1971 CWI was granted, Defendants are only making payments to Mr. Cunningham based upon a 9.0% P.209 interest. This is a breach of D f dn 'ot c wt MrCunningham. e nat cn at i e s r s h . RESPONSE: Denied.

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38. Pursuant to the PetCorp Plan and the ExCo Plan, on March 24, 1978, Hamilton Brothers Oil and Gas Corporation, a subsidiary of PetCorp, ExCo, and certain limited partnerships assigned to Frederic C. Hamilton, as Key Employee Incentive Plan Trustee, various interests relative to the oil and gas properties acquired through the Hamilton Brothers Oil Company 1977 Joint Venture and accounted for in the 1977 accounting units. RESPONSE: Admitted that Hamilton Brothers Oil & Gas Corporation, Frederic C. Hamilton and certain other entities executed a certain written assignment, which speaks for itself. Otherwise, denied. 39. Mr. Hamilton subsequently assigned his interest to various beneficiaries of the PetCorp Plan, or other similar plans. One of these beneficiaries was Mr. Cunningham, who received a .80000% carried working interest (" 1977 CWI" in and to all oil and gas properties ) owned or held in trust for certain principals by the following Hamilton Companies: HBOC, ExCo, Hamilton Brothers Oil and Gas Corporation, and Hamilton Brothers Canadian Gas Company, Ltd. These properties were to be accounted for in the Hamilton Companies' 1977 All Areas Accounting Unit. RESPONSE: Admitted only that Frederic C. Hamilton and Scott A. Cunningham executed a certain written assignment, which speaks for itself. Otherwise, denied. 40. Mr. Cunningham' 1977 CWl assignment also provides, among many other s things, that Mr. Cunningham assigns, transfers and sets over all of his right, title, and interest derived thereunder to the purported partnership known as HBA. RESPONSE: Admitted only that Frederic C. Hamilton and Scott A. Cunningham executed a written assignment, which speaks for itself. Otherwise, denied. 41. The properties accounted for under the 1977 Accounting Unit are United Kingdom petroleum licenses P.276 and P.277. Of these, the property at issue in this lawsuit is Block 9/9b of License P.276. RESPONSE: Defendants lack knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 41, because the alleged assignment presumably referred to is not specified or identified, and therefore deny them. 42. License P.276 was granted by the United Kingdom Secretary of State for Trade and Industry on June 16, 1978, to The British National Oil Corporation and BP.

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RESPONSE: A m tdt t no aot ue1, 98 t U idKndm s er a o d ie h o r bu Jn 6 17,h n e i o ' Sc t y f t a e t g er State for Energy made license P.276 with the British National Oil Corporation and BP Petroleum Development Limited. Otherwise, denied. 43. On August 24, 1978, BP entered into a Cross-Assignment Agreement with Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, RTZ Oil and Gas Limited, Blackfriars Oil Company Limited, and the Trans-European Company Limited, whereby BP reduced its interest in P.276 to 19.6%, and Hamilton Brothers Oil Company (Great Britain) Limited acquired a 7.791% interest therein, Hamilton Brothers Petroleum (U.K.) Limited acquired a 5.145% interest therein, and Hamilton Brothers Exploration (U.K.) Limited acquired a 1.764% interest therein. RESPONSE: Admitted that on or about August 24, 1978, BP Petroleum Development Limited, Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, Hamilton Brothers Exploration U.K. Limited, RTZ Oil and Gas Limited, Blackfriars Oil Limited, and the Trans-European Company Limited, entered into a written CrossAssignment Agreement, which speaks for itself. Otherwise, denied. 44. Pursuant to alleged contractual agreements, the beneficial interests in the license interests held by Hamilton Brothers Oil Company (Great Britain) Limited, Hamilton Brothers Petroleum (U.K.) Limited, and Hamilton Brothers Exploration (U.K.) Limited were purportedly held by Hamilton Brothers North Sea (1977) Limited (" 1977" U.K. ExCo, and HB U.K. HB ), PetCorp, respectively. RESPONSE: Defendants deny knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 44, because the alleged contractual agreements are neither specified nor identified, and therefore deny them. 45. On December 31, 1984, ExCo U.K. merged into HB U.K. PetCorp, with the surviving company named HB U.K. PetCorp. After said merger, HB U.K. PetCorp owned all assets previously owned by U.K. ExCo. Thus, after said merger, HB U.K. PetCorp owned a 6.909% interest in P.276.

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RESPONSE:

Admitted that on or about December 31, 1984 Hamilton Brothers U.K.

Exploration Company and Hamilton Brothers U.K. Petroleum Corporation merged, and the latter was the name of the surviving corporation. Otherwise, denied. 46. Subsequently, HB 1977 was dissolved and its assets were conveyed to HOGB, including the 7.791% interest in P.276. RESPONSE: Admitted that Hamilton Brothers North Sea (1977) Limited, Hamilton Oil Great Britain PLC and various other parties entered into a certain written assignment dated February 2, 1984, which written assignment speaks for itself, and that Hamilton Brothers North Sea (1977) Limited was dissolved. Otherwise, denied. 47. Pursuant to a Supplemental Agreement to Joint Operating Agreement, dated December 17, 1986, HOGB acquired HB PetCorp U.K.' 6.909% interest in P.276, giving s HOGB a 14.7% interest in the license. RESPONSE: Admitted that on or about December 12, 1986, Hamilton Oil Great Britain PLC, Hamilton Brothers Petroleum U.K. Corporation and other parties entered into a certain written Supplemental Agreement and Joint Operating Agreement, which speaks for itself. Otherwise, denied. 48. On January 1, 1988, PetCorp, HBA, HOGB, and HB U.K. PetCorp entered into a Net Profits Agreement, which essentially restated the 1977 CWI Mr. Cunningham received in 1977. The stated purpose of the Net Profits Agreement was to " reconstitute the earlier assignments in order to bring them into comp ac wtt apoe Pa. lne i h prvd l " i h e n RESPONSE: Admitted that on or about January 1, 1988 Hamilton Brothers Petroleum

Corporation and Hamilton Brothers Associates entered into a certain written agreement, which is in writing and speaks for itself. Otherwise, denied. 49. In the Net Profits Agreement, PetCorp assumes the obligation to make the payments contemplated under the original 1977 CWI assignment. The Net Profits Agreement further stated that " relationship of [HBA] to PetCorp shall be that of creditor to debtor, and The associates shall not have nor shall associates be construed to have any interest in the properties,

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the production therefrom or the proceeds from sale of production therefrom. [HBA] shall only be entitled to payment from the general corporate assets of PetCorp of amounts determined by reference to the Net Profits from the properties as set forth herein." RESPONSE: Admitted that on or about January 1, 1988, Hamilton Brothers Petroleum

Corporation and Hamilton Brothers Associates entered into a certain written agreement, which is in writing and speaks for itself. Otherwise, denied. 50. P.276 reached Payout in 2001. At that time, Defendants began making payments to Mr. Cunningham on account of his 1977 CWI. RESPONSE: Denied. 51. Instead of making payments on account of the 14.7% interest in P.276 held by the Hamilton Companies at the time the 1977 CWI was granted, Defendants are only making payments to Mr. Cunningham based upon a 6.909% P.276 interest. This is a breach of Defendants' contracts with Mr. Cunningham. RESPONSE: Denied. 52. Defendants and/or their predecessors have improperly and without Mr. C ni hm s at r ao o cnetprot t r ue t i e s t w i Mr un ga ' u oi t n r osn upr d o e c h n r t o h h . n h zi e d e te s c Cunni hm s17 ad17 C saaht og asr so sl n a ' 91 n 97 WI tc h uh e e f e -dealing transactions with g t r i f their affiliated companies. RESPONSE: Denied.

III. CLAIMS FOR RELIEF FIRST CLAIM FOR RELIEF (Breach of Contract ) 53. Mr. Cunningham incorporates all previous paragraphs herein.

RESPONSE: Defendants incorporate each and every response and denial to paragraphs 1 through 52 with the same force and effect as if fully set forth herein. 54. Defendants and/or their predecessors or successors contracted to pay contracted to pay Mr. Cunningham pursuant to the Hamilton Companies'50% interest in P.209 and the Hamilton Companies' 14.7% interest in P.276.

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RESPONSE: Denied. 55. Defendants have instead paid Mr. Cunningham pursuant to a 9.0% interest in P.209 and a 6.909% interest in P.276. This is a breach of Defendants and/or their predecessors o scesr contracts with Mr. Cunningham. rucs s o' RESPONSE: Denied. 56. Mr. Cunningham has been damaged by these breaches of contract in an amount to be proven at trial. RESPONSE: Denied. SECOND CLAIM FOR RELIEF (Promissory Estoppel) 57. Mr. Cunningham incorporates all previous paragraphs herein.

RESPONSE: Defendants incorporate each and every response and denial to paragraphs 1 through 56 with the same force and effect as if fully set forth herein. 58. Defendants and/or their predecessors or successors promised to pay Mr. Cunningham pursuant to the Hamio C m ai ' l n o pn s 50% interest in P.209 and the Hamilton t e Companies' 14.7% interest in P.276. RESPONSE: Denied. 59. Mr. Cunningham relied on said promises to his detriment.

RESPONSE: Denied. 60. Defendants have instead paid Mr. Cunningham pursuant to a 9.0% interest in P.209 and a 6.909% interest in P.276. This is a breach of Defendants and/or their predecessors o scesr promises to Mr. Cunningham. rucs s o' RESPONSE: Denied. 61. at trial. RESPONSE: Denied. Mr. Cunningham has been damaged by these breaches in an amount to be proven

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THIRD CLAIM FOR RELIEF (Breach of the Covenant of Good Faith and Fair Dealing) 62. Mr. Cunningham incorporates all previous paragraphs herein.

RESPONSE: Defendants incorporate each and every response and denial to paragraphs 1 through 61 with the same force and effect as if fully set forth herein. 63. Defendants and/or their predecessors or successors contracted to pay Mr. Cunningham pursuant to the 50% interest in P.209 and the 14.7% interest in P.276 owned or held in trust by the Hamilton Companies. RESPONSE: Denied. 64. Defendants have instead paid Mr. Cunningham pursuant to a 9.0% interest in P.209 and a 6.909% interest in P.276. This is a breach of Defendants and/or their predecessors o scesr cn atwt MrC ni hm rucs s ot c i o ' r s h . un ga . n RESPONSE: Denied. 65. Defendants had an obligation to perform their contracts with Mr. Cunningham consistent with the implied covenant of good faith and fair dealing implied therein by operation of law. RESPONSE: Denied. 66. Defendants and/or their predecessors or successors had discretion in determining how the interests relating to their contracts with Mr. Cunningham would be dealt with and how Mr. Cunningham would be paid pursuant to those contracts. RESPONSE: Denied. 67. Defendants failed to exercise this discretion fairly and in good faith, including, without limitation, by improperly purporting to reduce the i e st w i MrC ni hm s n r to h h . un ga ' te c n 1971 and 1977 CWIs attach through a series of self-dealing transactions with their affiliated companies. RESPONSE: Denied. 68. Mr. Cunningham has been damaged by these breaches of the covenant of good faith and fair dealing in an amount to be proven at trial. RESPONSE: Denied.

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RULE 12 AND AFFIRMATIVE DEFENSES 1. 2. 3. The Amended Complaint fails to state claim upon which relief can be granted. The assignments that appear to have been alleged are void. The assignments that appear to have been alleged may be illegal and unenforceable under the laws of the United Kingdom of Great Britain and Northern Ireland, the laws of England and Wales, the laws of the United States, and the laws of Colorado. 4. Pa tf c i s a b br d i ln fs lm m y e a e,nwhole or in part, by the doctrines of res judicata, i i' a r merger, bar, and/or collateral estoppel. 5. Pa tf c i sm yb br d i w o o i pr b t ap cb s t eo ln fs lm a e a e,n hl r n a , y h plal tu f i i' a r e t e i e at limitations. 6. Pa tf c i sm yb br d i w o o pr b t dc i of waiver and ln fs lm a e a e,n hl r a , y h otnes i i' a r e t e r estoppel. 7. 8. 9. 10. 11. 12. Pa tf c i s a b br diw o o ipr b t dc i o l hs ln fs lm m y e a e, hl rn a ,yh otn fa e. i i' a r n e t e re c Pa tf c i s rbr d yh dc i o acr ad as co. ln fs lm a a e b t otn fcod n stf t n i i' a e r e re ia i Pa tf c i s rbr d yh dc i o py et ln fs lm a a e b t otn f am n i i' a e r e re . Plaintiff is not the real party in interest, within the meaning of Fed. R. Civ. P. 17(a). Pa tf c i s a b br diwhole or in part, by the rule of perpetuities. ln fs lm m y e a e, i i' a r n Plaintiff has failed to join one or more necessary and indispensable parties.

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RESPONSE TO PRAYER TO AMENDED COMPLAINT WHEREFORE, having answered and otherwise responded to the Amended Complaint, defendants request that this Court enter judgment and related orders in favor of defendants: A. Dismissing the Amended Complaint with prejudice, with plaintiffs taking nothing. B. Awarding defendants their attorneys' and costs. fees C. Granting and awarding defendants such other and further relief as justice and equity require. Dated: August 1, 2005 Respectfully submitted,

s/ Frank C. Porada Bruce A. Featherstone Frank C. Porada FEATHERSTONE DESISTO LLP 600 17th Street, Suite 2400 Denver, Colorado 80202 Telephone: 303 626-7100 Facsimile: 303 626-7101 E-mail: [email protected] E-mail: [email protected] ATTORNEYS FOR DEFENDANTS BHP PETROLEUM GREAT BRITAIN LIMITED, BHP PETROLEUM GREAT BRITAIN PLC, BHP PETROLEUM U.K. CORPORATION and HAMILTON BROTHERS PETROLEUM CORPORATION

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CERTIFICATE OF SERVICE I hereby certify that on August 1, 2005, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following e-mail addresses: Stuart N. Bennett Lindquist & Vennum, P.L.L.P. [email protected] Charles F. Brega Lindquist & Vennum, P.L.L.P. [email protected] Eric B. Liebman Lindquist & Vennum, P.L.L.P. [email protected]

s/ Frank C. Porada Bruce A. Featherstone Frank C. Porada FEATHERSTONE DESISTO LLP 600 17th Street, Suite 2400 Denver, Colorado 80202 Telephone: 303 626-7100 Facsimile: 303 626-7101 E-mail: [email protected] E-mail: [email protected]