Class Action Suit May Affect 50,000 Haynesville Shale Landowners

On April 10, 2010 a class action suit was filed affecting Haynesville Shale property owners in all of the Haynesville Fields of north Louisiana.  The suit is filed against the Commissioner of Conservation and operators in the Haynesville Fields.  The basis of the suit is that the Commissioner of Conservation is authorized by statute to establish a production unit that can be drained by one well.  Members within one of the proposed classes are being denied their pro-rata share of production and the other class members are being denied their market value of their leasehold interest ownership.  This may affect some 50,000 property owners in northwest Louisiana!

 

We have met with some of the attorneys and are pleased with the representation.  The attorneys are class action attorneys Fayard & Honeycutt of Denham Springs; Simon, Peragine, Smith & Redfearn, LLP of New Orleans; Law Offices of Rudolph Estess, Jr. of Baton Rouge (in that office as special counsel is Jack C. Caldwell), Charles Tutt of Shreveport, Cave Law Firm of Baton Rouge, and Ryan Gatti an attorney from Bossier City.  Through our own independent research we have learned that Mr. Caldwell was a contributing author to the Louisiana Mineral Code and also served as Secretary of the Department of Natural Resources.

 

If successful this would create a tremendous economic boom to this area by creation of many more jobs, not to mention a substantial increase to severance taxes to the state of Louisiana.  We have received per request a filed copy of the pleadings filed in East Baton Rouge Parish.  The suit explains the law and the resulting violation.   Should you desire a copy of the suit please email your request to us at:  www.fairdrilling.com.  You may also wish to contact your attorney or local attorney for the group, Mr Gatti.

 

Andrew

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Another chance to make lawyers rich.
You are right about that "Les B." Those guys will be earning big bucks and they deserve it for taking this on!

Hey Roy,

I don't think ole Andrew was worried about the MO getting paid.

 

 

I believe the motive by him has something to do with land he owns in northeast De Soto parish off hwy 175 where he does not own the minerals - he only has surface rights. It's been HPB for a long time and he is pissed off about it!!! He wants smaller units so he can lease some of his land.
Thanks Jay, but it is not my suit. It will be interesting to see if those guys are actually able to enforce the law. What a novel idea.
I agree Andrew, I have no problem with 640 acres for HS units, but if that's what they want to do they need to change the law. We are a nation of laws, so be it then.
1) In general, a 640 acre unit does not hurt the property owner on average. Smaller units would get some property owners more money, but it would mean that other property owners would get nothing from that particular well. It's a zero-sum game. Anything one owner gets, another loses and vice versa.

2) If the entire section eventually gets drilled, you don't lose anything in the long run. You only lose if just your part of the section is drilled, and property owners in undrilled sections get part of "your" royalties and you never get any of "theirs" because "their" gas stays in the ground.

3) The 640 acre section is clearly illegal for the Haynesville shale. When the state issues unit orders, they are clearly fraudulent because is specifies that the unit can be economically drained by one well. Everyone, including the state, knows that there has never been, and never will be a Haynesville well that drains an entire section.

4) I think there's no chance in hell that the courts would ever rule that the 640 acre units are illegal. I agree that they should either obey the law or change the law. I don't think it's going to happen. If the courts did rule against the phony units, bribes would be paid, and the legislature would "correct" the law.

In summary, to the average property owner, it's a washout whether they do 640 acre units or smaller units. Smaller units might get you larger or smaller payments, but your expected winnings are exactly the same as your losses.

You're effectively putting the money of everyone in the section in a pot, and gambling on who gets how much out of the pot. As a group, the property owners walk out of the courtroom poker game with the same number of dollars as they walked in with.

Except the lawyers took a cut out of the pot.

And some of the smaller units may not get drilled due to higher administrative and legal costs if smaller sections are defined.
On further thought, if you're leased, and they haven't drilled in your part of the section, your lease would not be held by production any more. If they don't drill your "real" unit by end of the lease, the lease would expire. In theory, you could get another bonus payment and/or a better lease.

I also realized that the lease doesn't specify anything about the unit size, it just specifies the number of acres you own and the royalty percentage.
Like I said before Mac and Shalegeo, I completely agree with 640 acre units for the HS, change the law to make it legal, otherwise we continue to devolve into a banana republic.
Media coverage hot off the press.

http://www.shreveporttimes.com/article/20100430/NEWS01/4300310/1060

Among other things detailed in the article ...

"The suit, which seeks unspecified damages, also asks a judge to declare null and void any units created by the commissioner in excess of an area that cannot be drained by one well."

80)
I was wondering what happened to Mr Walker, good to see you drop in on the site. Do we really need to leave all the billboards up for this long?
Hello "Greedy Landowner." Yes I have not dropped in on the site for awhile, but believe this is the premier site for those landowners interested in the Haynesville Shale. As far as my billboards (which lead to our website, www.fairdrilling.com) I get many responses every week from folks who have noticed it for the first time..........so my answer is "yes"......we need to keep the billboards up!

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