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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Replies to This Discussion

Permalink Reply by Andrew Walker on April 17, 2010 at 1:47
Actually the rules of the race were established in the year 1940 and have not changed. This was long before the horses left the gate. It's a crooked race. You make a very interesting point correlating gas prices with 80 acre spacing. Perhaps someone smarter than I could run some numbers and predict the affect on gas prices? I would be very interested to see this. As you probably know some units are already being developed with 8 wells on 80 acre spacing.
Permalink Reply by essay on April 16, 2010 at 19:19
this suit is specious at best, in my opinion... i agree with the general consensus; doesn't have a snowball's chance, and the lawyers will be the only beneficiaries.
Permalink Reply by Henry on April 16, 2010 at 23:30
Andrew,
Would this suit apply to the Black Lake Field in Natchitoches Parish? This field was developed in the 1960's and the entire field was a single production unit.
Permalink Reply by Andrew Walker on April 17, 2010 at 1:33
It would not apply to the Black Lake Field...only to developed Haynesville Fields
Permalink Reply by Checkmateking on April 17, 2010 at 2:29
Henry,
As I have been informed the Black Lake field was formed as a single unit for conservation purposes, all natural gas made in the field was reinjected to spur the ultimate recoverable oil reserves. This was a smart move and ultimately a very wise choice on behalf of the operators and landowners.
Permalink Reply by Henry on April 17, 2010 at 5:56
Checkmating,
Interesting. Thanks for the bit of history,
Permalink Reply by Kat Bloomfield on April 18, 2010 at 1:17
forced pooling survives constitutional challenge on the premise that all receive their fair share because a "unit well" is by definition one that drains the area of the unit. The concept of HBP exists because of the due diligence statutory standard (watered down by years of industry favorable rulings). If any of the premises, definitions, or assumptions are false, then forced pooling fails constitutional muster. So, the issues are whether the premises, definitions, and/or assumptions are true or false.
Permalink Reply by Kat Bloomfield on April 18, 2010 at 2:21
keep in mind that one of the underlying "assumptions" that underlies the constitutionality of forced pooling is the rule of capture, a "rule" which has no basis in science or fact. For a fairly thorough discussion, read the seminal supreme court decision in Ohio Oil Co. v. Indiana, 177 U.S. 190. http://supreme.justia.com/us/177/190/case.html

a basic tenet of debate/argument is that if the underlying premise is false, the conclusion is false.

That said, state courts consistently uphold the constitutionality of forced pooling, whether through crane analysis or blind acceptance of theories that are simply out of date and not supported by science. see, e.g., http://www.ndcourts.com/court/opinions/960328.htm

This will be an uphill battle.
Permalink Reply by RAY on April 18, 2010 at 3:59
every "class action" lawsuit I've heard of, the outcome is the same.

Lawyers get the DOLLARS
the cleints get the pennies.
Permalink Reply by Kat Bloomfield on April 19, 2010 at 3:07
when your bank short changes you $14.97/year . . . how would you convince a lawyer to handle that for ya?
Permalink Reply by The_Baron on April 19, 2010 at 4:21
I would just change banks.
Permalink Reply by Bobi Carr ("parker") on April 19, 2010 at 8:48
The unit orders say that the unit can be "efficiently and economically drained by a single well."

? ? ?

I am not a lawyer. I didn't even stay at a Holiday Inn Express last night, but I have a few questions.

By drain does it NECESSARILY mean COMPLETELY drain?

And if it the procedures were changed what happens to the ECONOMIC part of the equation.

But most importantly, what will be the CONSEQUENSES TO "the little guy" who unwittingly signs on to be a part of this suit?

Would his royalties be held in escrow (possibly for years) while the outcome is being determined? Would the running time on leases be suspended pending the conclusion of the suit?

The devil is ALWAYS in the details.

(Disclosure: I too have acreage that is held by a Cotton Valley well that doesn’t produce enough money monthly to buy a cup of coffee. You would think I’d jump on the bandwagon. Just because the rules are unpleasant to me personally, doesn‘t make them UNFAIR and I sure don‘t view them as ILLEGAL).

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