A judge has overturned a $3.2 million judgment against Dynegy Midstream Services LP and affiliate Versado Gas Processors LLC in a case brought by Apache Corp., ruling that the jury had reached its verdict without sufficient evidence against the companies.

In January, a Houston jury found that the Dynegy affiliates breached 18 gas purchase contracts with Apache “by failing to account and pay for over 400 MMcf of gas that Apache produced and delivered from its wells,” to New Mexico gas processing facilities operated by the Dynegy affiliates. Apache had told the court that the Dynegy affiliates had “engaged in bad faith” and broke their contractual obligations to pay for natural gas and natural gas liquids.

Its lawsuit stemmed from agreements among the three companies, in which Apache agreed to sell and deliver gas from wells located on leases in New Mexico and West Texas to Dynegy and Versado, who in turn agreed to receive, process and pay Apache for the gas. Apache claimed that the affiliates did not pay for the gas and then tried to conceal that they could not account even for the gas.

“We are pleased with the judge’s ruling in this matter,” said Dynegy spokesman David Byford. “We believe this ruling reaffirms that Dynegy treats its customers fairly and acts in accordance with our contractual obligations.”

Apache spokesman Tony Lentini said, “We think the jury was right, the judge was wrong, and we’re going to appeal.”

Shares of Apache were up $1.11 Friday to close at $41.11 as the stock prices of oil and producers climbed on soaring crude prices. Dynegy’s stock closed flat at $3.91.

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