By Neil Ritchie

THE JULY jailing of Canadian man James Watchorn, the production manager found guilty of stealing highly-confidential geoscience information from TAG Oil, has sent shock waves through the small New Zealand oil and gas industry.

The Employment Relations Authority (ERA) ordered Watchorn to pay NZ$65,567 in special damages to TAG for professional negligence and breach of contract in June.

The ERA further ordered Watchorn to pay four penalties of NZ$3000, half of which (NZ$6000) was to be paid to TAG and half to the Crown.

Many in the New Zealand industry thought the sentencing of Watchorn – in the New Plymouth District in mid-July – would not be any more severe.

However, in the landmark case, the former TAG production manager was jailed for 30 months for stealing company secrets.

Judge Allan Roberts had earlier found Watchorn guilty on three counts of accessing a computer for dishonest purposes, stealing geotechnical data by illegally downloading files containing TAG’s “secret recipes” for locating oil and gas fields.

This was before Watchorn left to go to work for rival New Zealand Energy Corporation during mid-2012.

While the judge found there was no evidence that Watchorn had actually shared the confidential information with NZEC, TAG chief operating officer Drew Cadenhead told the court his company had to assume Watchorn had done so.

The judge also found that, to ensure its bids in the 2012 Petroleum Blocks offer were successful, TAG made far firmer work program commitments, involving the drilling of more wells, than it would otherwise have made.

The case, which had no similar case law to compare it with, was unique, the judge said. He added that Watchorn had shown no remorse, with minimal insight into his offending.

“This was to all intents and purposes significant offending . . . it seems to be highly calculating and opportunistic. The impact on the company (TAG) is demonstrable.”

However, Watchorn has already appealed his sentence, which is due to be considered by the Court of Appeal, and is also challenging the ERA rulings.