Modiin Energy: Success in the Gulf of Mexico, legal escalation in Colorado

While the partnership's flagship offshore project returns to full production while saving millions of dollars, another onshore project becomes embroiled in a sharp lawsuit against the operator alleging contract breaches and delayed revenues.

Modiin Energy reported a day of mixed news from its operations in the United States. At the Big Foot project in the Gulf of Mexico, maintenance work on a central well was successfully completed, ahead of schedule and below budget, which is expected to boost production. Simultaneously, at the North Park Basin project in Colorado, the partnership filed a lawsuit against the operator alleging breach of contract, delayed revenues, and withholding of information, after mediation between the parties failed.

Modiin Energy-limited Partnership reported today (Tuesday) two material events of a contrasting nature in its two primary oil assets in the United States. While the flagship offshore project 'Big Foot' in the Gulf of Mexico recorded operational and financial success, activity at the onshore 'North Park Basin' project in Colorado reached a boiling point with the filing of a severe lawsuit against the project operator.

Operational success and millions saved at Big Foot

In positive news, Modiin updated on the completion of comprehensive workover operations at well A-4 in the Big Foot project, operated by energy giant Chevron. The well, which ceased production in July 2026 due to the expiration of the shelf life of its subsurface pump, has now returned to full production. According to the partnership's report, the work was completed about 10 days ahead of schedule and at a cost significantly lower than the original budget.

The total cost of the operations (100%) amounted to approximately $26.8 million, compared to an approved budget of approximately $36.2 million—a savings of about $9.4 million. Modiin's share of the costs (via a subsidiary holding a 12.5% working interest in the field) stood at approximately $3.35 million, lower than the original expectation of about $4.5 million. As part of the work, a dual and improved pump system was installed, including a backup pump, which is intended to prevent similar shutdowns in the future.

The return of the well to operation is expected to contribute significantly to the partnership's oil production. Prior to the shutdown, well A-4 produced approximately 13,000 barrels of oil per day (100%), with Modiin's share standing at about 1,600 barrels per day. The well was completely shut down for 39 days, so its return to regular operation will be strongly felt in the financial statements for the fourth quarter of 2026.

Acute dispute in Colorado: Lawsuit against the operator

In stark contrast to the positive atmosphere from the Gulf of Mexico, Modiin reported a severe escalation in its dispute with the operator of the North Park Basin project in Colorado, Gondola Resources. After a mediation process between the parties failed, a wholly-owned subsidiary of Modiin filed a lawsuit in the District Court in Denver, Colorado, against the operator and related parties.

The complaint attributes to the operator a series of alleged breaches of the joint operating agreement. Among the claims: performing field operations without approval and delaying revenues due to Modiin, improper charges and deductions, failure to pay Modiin's share of revenues, withholding access to books, records, and operational information, and interference with Modiin's right to independently market its share of produced oil.

Modiin, which holds a 50% working interest in the oil asset, is suing for damages in an undetermined amount, alongside declaratory relief and injunctions. Among other things, the partnership is requesting the court for an order allowing it to take and sell its share of the oil independently (in kind)—a step indicating a total lack of trust in the operator. At this stage, the legal proceeding is in its early stages and its outcomes are uncertain.