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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Permalink Reply by Kat Bloomfield on April 24, 2010 at 5:44
a twenty year lease would be reduced to ten years because by law a mineral lease of the ilk we speak is limited to a ten year primary term
Permalink Reply by Kat Bloomfield on April 24, 2010 at 0:24
comparing desegregation with unitization is a stretch. Some conduct is so opprobrious, it must be rectified immedidately and retroactively. Other conduct is not and is prosccribed only prospectively. You've hit on yet another large constitutional issue: if the lawsuit were to change the law, as it's been applied to date, would the ruling apply retroactively? There is a judicially created "test" for whether such a ruling can or should be retroactive or prospective only.
Permalink Reply by Linda Whatley on April 30, 2010 at 8:46
I totally agree with "The Baron".....
Permalink Reply by Linda Whatley on April 30, 2010 at 12:06
Explain to me how you got "ripped off" Andrew Walker.
Permalink Reply by Andrew Walker on April 22, 2010 at 5:05
This is interesting to me. Title 30:9 requires that tracts receive their "just and equitable " share of the field's production and so each unit's production was limited under law. This "allowable" production for each unit was set at the production capability of ONE WELL. This was the case for decades. There should be no "duty to develop" under law if the single unit well is producing its allowable. With the Haynesville, however, the Commissioner is not setting an allowable for each UNIT, as is required...but he is instead setting an allowable for each WELL (which is the production capability of each)! This violation of statute is enabling situations where one Haynesville unit may have several horizontal wells with a huge allowable sitting next to a unit with one vertical well with a relatively tiny allowable. Not right.
Permalink Reply by The_Baron on April 22, 2010 at 9:16
Why should a unit with multiple horizontal wells that have little or no communication be compared to a unit with one vertical well? Sounds like apples and oranges.
Permalink Reply by Andrew Walker on April 23, 2010 at 14:53
Because, Baron, the mineral owner force-pooled into the unit with one vertical well, has the same rights as the owner force-pooled into the unit with multiple wells. Why should he have to wait some unpredictable length of time for his unit to be fully developed like his neighbor? Time value of money...
Permalink Reply by The_Baron on April 26, 2010 at 3:12
How do you reconcile your demands with the fact that most leased owners have already agreed to be pooled in their lease?

7. Lessee is hereby granted the right as to all or any part of the land described herein, without Lessor's joinder, to combine, pool or unitize the acreage royalty or mineral interest covered by this lease, or any portion thereof, at any time during the life of this lease, with any other land, lease or leases, royalty or mineral interests in or under any other tract or tracts of land in the vicinity thereof, whether owned by Lessee or some other person, or corporation so as to create, by the combination of such lands and leases, one or more operating units, as to any and all mineral horizons, provided that no one operating unit shall, in the case of gas, including condensate, embrace more than six hundred forty (640) acres, and in the case of oil, including casinghead gas, embrace more than eighty (80) acres; and provided further, however, that if any spacing or other rules and regulations of the State or Federal Commission, Agency, or regulatory body having or claiming jurisdiction has heretofore or shall at any time hereafter permit or prescribe a drilling or operating unit or spacing rule in the case of gas, including condensate, greater than six hundred forty (640) acres, or in the case of oil or casinghead gas greater than eighty (80) acres, then the unit or units herein contemplated may have, or may be redesigned so as to have, as the case may be, the same surface content as, but not more than, the unit or the acreage in the spacing rule so prescribed or permitted.
Permalink Reply by Mac Davis on April 26, 2010 at 12:40
GoshDarn, the problem here is that the visiting team paid off the refs and interpreted the rules differently from the official written rule book.
Permalink Reply by sesport on April 26, 2010 at 19:36
GoshDarn - LOL!! Whining about the sugar plums??? Good one!

IMO, I won't even pretend to be ominipotent about motives so I'll presume this isn't ALL about "whining" & "getting pissy," again it may also be about equitable treatment for ALL land/mineral owners in a unit. And that means that the "star players" won't exert undue influence over development & production of the play. Ya' know, as in possibly holding up development because they want to be "whiny" and/or "pissy" about their lease bonus or % royalty by threatening, with their majority interest, to hold out as a UMI. And by now even I know that a UMI with a more-than-majority interest will get a "pass" from the O&G companies. I'm thinking this cuts out the little guys.

Kinka reminds me of the majority interest shareholders in local banks here in the 80's who really, really, REALLY resisted change. But that was all about their controlling interests and feeling threatened that such control would be lost, not necessarily about the small share/stakeholders or the community as a whole.

No, the REAL football players of old never complained, whined, got pissy ... matter of fact they never even mentioned lost opportunities. But they didn't support a system that may have robbed the least influential members, so as a team the right thing to do was to stand up for principle.

They remain good sportsman to this day, and pass that on.

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Permalink Reply by Linda Whatley on April 30, 2010 at 8:51
Well said Gosh Darn!
Permalink Reply by Mac Davis on April 26, 2010 at 12:37
Baron, no one disputes that 640 acre units are legal for those mineral interests who consent to 640 acre units, be it from a lease or with a separate agreement.

They're illegal for force pooling if any of the mineral interests don't agree. It's also illegal for the Commissioner of Conservation to issue an order claiming that the unit can be efficiently and economically drained by one well.

Once again, 640 acres may be a good idea. Why not make it legal instead of simply doing it illegally? Since the units as defined are illegal, don't we all run the risks of getting screwed through long drawn out legal proceedings and having the courts divvy up things differently, with wild packs of lawyers tearing off hunks of our money at various steps in the legal process?

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