bought by Apollo”, which I infer was irrelevant to the MEC OpCo deal. I note these evidentiary
points because they are inconsistent with the assertion of Mr. Plunk that he was not answering or
addressing work emails on that date.
In cross-examination, Mr. Carr admitted that in September 2011, he was aware of the
effect that the “can of worms” opened by United Hunter Oil & Gas Corp (“United Hunter”)
would have on the Share Transaction, and that he discussed this with Mr. Lambert. Briefly,
United Hunter engages in the exploration of oil and gas properties, and it had engaged in a
project with Merit, out of which, a dispute arose. As the dispute with United Hunter continued,
Mr. Carr involved a number of individuals, including Mr. Plunk.
In direct examination, Mr. Carr testified that he explained to his colleagues in an email
communication, which included Mr. Plunk, that the pipelines that United Hunter was seeking to
tie into, as well as the downstream facilities, were not licensed to carry the sour products that the
subject well would produce. The advice MEC OpCo consistently received from Mr. Lambert
was not to “open a can of worms” with the Regulator while there was a sales process in place.
Otherwise, the pipeline non-compliance would become public.
In cross-examination, Mr. Plunk testified that he was aware that the main concern of a
purchaser is knowing what liabilities they are assuming. In that same cross-examination, he
again confirmed that it would be very important for a purchaser, such as NEP, to know what
liabilities it was assuming in the transaction.
In a later cross-examination, Mr. Plunk testified that he was aware that NEP would be
relying on Merit to ensure that Schedule D was truthful, accurate and complete. Mr. Plunk also
confirmed that as the individual signing the Officer’s Certificate at closing, he expected Schedule
D would incorporate, with specifics, all known instances of non-compliance of which key
employees, like Ms. Hall, were aware. In cross-examination, Mr. Plunk testified that if Merit had
any specific information regarding non-compliances with pipeline licences, SCVFs or suspended
wells, the information would be set out in Schedule D in appropriate detail for the purchaser.
In cross-examination, Mr. Carr testified that he sent the Carr July 2011 Email to Mr.
Plunk and other Persons of Knowledge because he knew that the costs associated with clean-up
of the MEC OpCo assets were both large and undetectable from a review of the information
disclosed to NEP. The Carr July 2011 Email was sent to Mr. Hagge and Mr. Moffitt on July 20,
2011, and Mr. Plunk was copied on the communication.
In cross-examination, Mr. Plunk testified that he knew Mr. Bud Newton was seeking
assurances regarding non-compliance matters and Schedule D.
The evidence is that none of the Persons of Knowledge were permitted to meet with NEP
alone. Mr. Plunk confirmed in direct examination that he personally sat in on some of the
meetings. He stated that he attended those meetings because he “...had been the one that put out
the persons of knowledge e-mail so [he] felt like [he] needed to be there for the meetings”. That
said, he later testified that he never spoke to the Persons of Knowledge about their responses
before he attended the Persons of Knowledge meetings with Mr. Bud Newton on August 16,
2011 (collectively, the “POK Meetings” and individually, the “POK Meeting”).
As a summary comment, the evidence is that under the Newton Business Plan, NEP
planned to drill between 100 and 250 new wells within three years after it purchased the