Range Resources: Suggestions for Lessors and Unleased Land Owners

Range Resources has now surpassed Chesapeake Energy in complaints I have received.  That's a pretty sorry state of affairs considering that Chesapeake has been the operator most aggressive in deducting post production royalty and ignoring lessors' requests for a number of years. 

Range has delayed reporting production to the state and paying royalties to mineral lessors under some of their wells on too many occasions over the last year.  Their Jackson Parish well that was completed in early December 2016 only recently reported production to the state and, as far as I know, still has not paid royalty.  Hopefully royalty checks will be received in March.

For those who are leased and Range is the operator of your unit, I suggest the following.  If you have not received payment 180 days after first production date, send a demand for payment by certified letter.  The date the letter is received begins a thirty day response period.  The letter might get you paid, or not, however it does establish your right to demand interest on delinquent royalty payments once Range does begin to pay.  If Range has no compelling reason for refusing to pay after 180 days, you can seek legal counsel for an explanation of your options.  Hopefully you do not have to sue but you have maintained your right to do so by sending the demand letter.

For those who are not leased but are approached with an offer in the future, take heed.  Most standard form O&G leases do not contain a clause for timely payment of royalty.  I would not sign a lease with a company that I suspected or knew represented Range without a clause stipulating the maximum length of time to first payment.  I'd like 120 days but would settle for 180 days because Louisiana courts seem to think that 180 is reasonable.

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Permalink Reply by Steve P on February 26, 2018 at 15:13

Skip:  you are saying, notwithstanding my long-standing problems with CHK, and the fact that they say they want to keep off-loading assets, my nightmare will be if CHK sells my properties to Range Resources?  what can be worse than having 2 producing HA wells in 2 different units and collecting no royalties for 3 years?

Permalink Reply by Skip Peel - Mineral Consultant on February 26, 2018 at 15:21

I don't know if Range can claim three years but they often go over one before paying on new wells.  Does CHK deduct for capital expenditures?  Range does (its for building the gathering and treating infrastructure), and then charges the same lessors per mcf to run their gas through it.  How about "stand by" charges, got any of those? 

As to your situation regarding suspended payments, CHK is scrambling to correct a lot of incorrect decimal interests owing to inaccurate survey plats.  In fact CHK is now claiming that they do not have some of the missing surveys.  That's either a pretty blatant falsehood or a potential admission of fraud on their part.  More on this soon.

Permalink Reply by Chris on February 26, 2018 at 15:58

Ever try getting a division order out of RRC? RRC was a victim of the Greater Fool Theory and a masterful pump and dump.  They deserve all the victim blaming for doing ZERO due diligence. Wildhorse, MRD, Penn Tex and NGP came out of it smelling like roses and RRC will take the fall. Although it is the mineral owners and RRC stockholders that will truly lose.  I predict they are in bankruptcy in short order. Unfortunately, RRC kept much of the inept land department of MRD and things have not become any better. I could write a novel about how much I despise WRD and RRC. 

Permalink Reply by LN on February 26, 2018 at 17:48

Skip, that's very interesting information about the surveys and the decimal interests..

Permalink Reply by LN on March 6, 2018 at 2:51

In 2016, the Oil & Gas Co. sent a Div. Order to me.  I am unleased.  I contacted them for an explanation and was told that the decimal interest was calculated by using the Land Survey. (I kept email copies of my entire dialogue with them, which was quite extensive and was told that the Land Survey had been done). However, when I contacted the LDNR, it was discovered that the Land Survey was never done.  (How were they able to be sure that the Landowners were receiving correct payments without using the Land Survey)?  When the Oil/Gas Co. finally submitted the Survey to the LDNR for approval, it was not correct.  They finally corrected the errors and the Land Survey was approved.  So, for four years they sent Div. Orders to Landowners...without an approved Survey from the LDNR.  

This Well started producing in 2012.  

Permalink Reply by Skip Peel - Mineral Consultant on March 6, 2018 at 3:00

Just to be clear, LN.  The Department of Natural Resources told you that "the Land Survey was never done"?  Or, did they say they had never received a copy of the unit survey plat?  If it is the former, do you have email copies of that statement?

Permalink Reply by LN on March 6, 2018 at 3:38

Yes, I have the email. I keep copies of everything.  They sent an email to me stating that there was no record that the survey was ever done.  I requested to receive copies of all correspondence that the LDNR Engineer sent to the O & G Co.  

Permalink Reply by Skip Peel - Mineral Consultant on March 6, 2018 at 3:51

Thanks for the clarification.  There is a difference between the LDNR stating that there was no original survey done and that they had no record that the survey was ever done.  This is an issue that I have been pursuing since last July.  At the time I performed my research there were approximately 850 Haynesville Shale units that did not have unit surveys entered in the SONRIS database.  I am of the opinion that surveys were not done to reasonable and required standards but keep in mind that title attorneys would not have signed off on Division Order Title Reviews without using some survey.  Would this constitute fraud?  IANAL  For newbies, that means I Am Not A Lawyer.

For members following this thread as it relates to Range Resources, I have also turned into the DNR/OOC, a list of delinquent unit surveys in the Terryville Complex.  This is a wide spread problem not limited to Haynesville Shale units.

Permalink Reply by LN on March 6, 2018 at 4:48

Hi Skip,

I read over the email history with LDNR regarding the survey and this is what I found:

An Oil & Gas Company employee told me that the unit survey was done April, 2016.

_________________________________________________________________________

     LDNR engineer - ..."from your request a compliance order will now be generated and sent to the operator giving them 60 days from the date mailed to submit a unit survey plat for the referenced unit.  Upon receipt, the Office of Conservation will review and approve (if there are no discrepancies).

_________________________________________________________________________

     From there a copy of the approved unit plat will be filed in our office and the originals will be sent back to the operator who will file it in the parish courthouse.  You will be copied on the compliance order sent to the operator.

_________________________________________________________________________

     Today is the deadline to submit the unit survey plat.  If it doesn't come in today...a civil penalty will be levied on the operator once approved by the Commissioner.  If the operator fails to comply after the levying of the civil penalty, then additional regulatory sanctions will be imposed as deemed necessary.

_________________________________________________________________________

     My manager and director received the file and I will be issuing a civil penalty later today.

_________________________________________________________________________

     I have not received or seen a survey...We received some response from the operator yesterday afternoon and they should be sending in the unit survey this week.

_________________________________________________________________________

     We received the unit survey from XXXXX.  However we are unable to approve it at this time.  There is a discrepancy with the xxxxx that will need to be cleared up before approval.  We are reviewing and are in contact with XXXXX.

_________________________________________________________________________

     Approved Unit Survey Plat done on 12-22-16.  This Well started producing in 2012.

_________________________________________________________________________

I have a copy of the Approved survey.

Permalink Reply by Henry on March 1, 2018 at 15:21

I've been reading and paying attention.  Just not commenting.

Permalink Reply by Skip Peel - Mineral Consultant on March 1, 2018 at 15:30

It's okay to lurk, just speak up occasionally so we know you're here.  :-)

Permalink Reply by Jeanie Fallin Simmering on March 2, 2018 at 11:53

Now I read that RR is more or less pulling out of the Terryville field and leaving only one rig up. I don't really understand the lingo, and what that means for those of us who have operating wells there. Will we continue to receive royalty checks on what has already been drilled? I'm studying this on the computer so I'll have  better understanding of what is going on, or in this case, what is not going on, Does the fact that RR is leaving one rig in operation instead of the four that are there now mean less in royalty payments or does it mean that some will get paid and some will not? If RR is putting their resources back into the Marcellus field, can they still declare bankruptcy? With what you know, do you think that RR will sell the Terryville field to another company?

I want to thank everyone on here, and especially you, Skip, for your patience in explaining all this and sharing the information you have.

Jeanie Fallin Simmering

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