Conspiracy to drive down bonus price
Hi all!
Have been laying low for awhile now, but this story is one that I thought noteworthy of posting, especially for the neighborhood groups. What O&G has been saying about the prices of gas is clearly BS as it is conveniently forgotten this is a long term investment. If they don't HBP'd your property, then we can call that a short term. lol Look at it this way: If you lease @ the price of gas right now and gas goes up which we know it will.....are they going to come back to you and pay you the extra?? I think that these Barnett Shalers could look over here in the Haynesville to see more evidence of deceptive trade practice. Remember when all they wanted to deal with was groups and now they don't want to deal with groups. Makes me wonder if these lawsuits are another reason they don't what to deal with groups and not just being able to push an individual mineral owner around. Anyways, this is a 4 page write up but very interesting that this has gone on in the Barnett as well as here with the one common denominator being mineral owners getting screwed.
What are ya'll thoughts on this?
Earlene the barefooted UMO
http://www.fwweekly.com/index.php?option=com_content&view=artic...
Worth the Paper They're Written On
Wednesday, 07 October 2009 10:41 DAN MCGRAW
Page 1 of 4
Both the Booth and Myles cases claim that XTO and the other companies engaged in a civil (not criminal) conspiracy by "conceiv[ing] a plan or scheme in concert with each other [to] drive the bonus and royalty payments to a far lower amount than was being paid at the time."
The object of the scheme, the suits allege, was to circumvent the "natural market forces" that had been sending royalty and bonus rates higher and instead to substitute artificially low bonus and royalty prices, thereby increasing the companies' profits and injuring landowners' interests.
Then there is the aspect of long-term investment. "These [gas] companies have always told the people they were leasing from that the Barnett Shale would be lasting many decades," he said. "So you shouldn't be trying to change the market just because the price has gone down for a short time. That is deceptive trade practice, and we will prove that."
Have been laying low for awhile now, but this story is one that I thought noteworthy of posting, especially for the neighborhood groups. What O&G has been saying about the prices of gas is clearly BS as it is conveniently forgotten this is a long term investment. If they don't HBP'd your property, then we can call that a short term. lol Look at it this way: If you lease @ the price of gas right now and gas goes up which we know it will.....are they going to come back to you and pay you the extra?? I think that these Barnett Shalers could look over here in the Haynesville to see more evidence of deceptive trade practice. Remember when all they wanted to deal with was groups and now they don't want to deal with groups. Makes me wonder if these lawsuits are another reason they don't what to deal with groups and not just being able to push an individual mineral owner around. Anyways, this is a 4 page write up but very interesting that this has gone on in the Barnett as well as here with the one common denominator being mineral owners getting screwed.
What are ya'll thoughts on this?
Earlene the barefooted UMO
http://www.fwweekly.com/index.php?option=com_content&view=artic...
Worth the Paper They're Written On
Wednesday, 07 October 2009 10:41 DAN MCGRAW
Page 1 of 4
Both the Booth and Myles cases claim that XTO and the other companies engaged in a civil (not criminal) conspiracy by "conceiv[ing] a plan or scheme in concert with each other [to] drive the bonus and royalty payments to a far lower amount than was being paid at the time."
The object of the scheme, the suits allege, was to circumvent the "natural market forces" that had been sending royalty and bonus rates higher and instead to substitute artificially low bonus and royalty prices, thereby increasing the companies' profits and injuring landowners' interests.
Then there is the aspect of long-term investment. "These [gas] companies have always told the people they were leasing from that the Barnett Shale would be lasting many decades," he said. "So you shouldn't be trying to change the market just because the price has gone down for a short time. That is deceptive trade practice, and we will prove that."
Tags: Conspiracy, bonus, down, drive, price, to
Views: 222
Replies to This Discussion
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Permalink Reply by Grillin' - MmmMmm on -
If you have a small position, the operator may be willing to "carry" you as a UMI owner. If you have too large a position, they are going to be unwilling to drill the well and carry a UMI owner for no penalty. For instance, if you owned 50% of the unit, the operator would have to pay for 100% of the costs and risks, recoup their money then only get 50%. That kind of risk exposure isn't very attractive to most companies. That's why. Big unleased parcels of land create issues; small tracts don't have that much exposure.
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Permalink Reply by sesport on
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Hey, guys, one of my quirky thoughts here. Since, in essence mineral owners are a sort of resource "farmer," I wonder if it would be possible to qualify for some kind of subsidy NOT to farm in light of the amount of gas in storage? hmmmm, lol
Okay, whoever hit me on the back of the head better cut it out. I said it was one of my quirky thoughts.
:0)
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Permalink Reply by Grillin' - MmmMmm on
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That's a great idea. Farmers have used this system for years...getting paid not to plant! All the while, people around the world starve to death (warning: soft spot of conservative Republican exposed!!).
Tell you what Prez Obama, I'll not drill 10 Haynesville wells if you will pay me for 50% of what I would have produced! 10 times 20 MMCF/day times 50% times $4/mcf. Quite the payday!!!!! This seems a fitting piece of the current "Gov't must do everything for everyone" policy. I'm going out to the mailbox and wait for my check! I'm bringing an ice chest full of hydration supplies and the portable grill! It is FRIDAY ya know!!!
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Permalink Reply by sesport on
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Something told me you were behind me. lol Want me to make you a foil covered motorcycle helmet for that soft spot? Now, let's head (no, better run) for the grill because something tells me we may have a mob after us for sidetracking this topic. Happy hydration! :0)
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Permalink Reply by Missy on
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Sesport and Grillin, You just made my weekend. :-) Thanks! And Thanks to all of you who share your knoweldge with those of us trying to navigate this whole businsess. I spend many hours here and something funny is good.
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Permalink Reply by Grillin' - MmmMmm on
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So I guess I should keep my day job?? But after my wells "don't decline" (since I'm getting paid to NOT drill them), I'll just not drill 10 more and start new checks coming!! I think I'll ramp up to a 15 rig No Drilling program too!
I think this is starting to sound like an old Justin Wilson routine so I'm gonna quit now!
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Permalink Reply by Mac Davis on
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Would you have to get the Louisiana Commissioner of Conservation to create a unit on which people would be force pooled to not drill? Would he have to certify that the unit covers and area that could be efficiently not drained by a single well?
Would you be restricted to not locating your wells in areas that are not less than 330' from the edge of a unit?
Would you have to do studies to evaluate the environmental impact of not drilling on your land? Would there be leases where the operating company has only a certain number of years to not drill on your land? If they DO not drill in the allotted time period, would the mineral rights be HBN (Held By Nonproduction?) Would the right to not drill revert to the surface owner after 10 years, despite the fact that you are engaged in profitable non production?
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Permalink Reply by Skip Peel - Mineral Consultant on
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Mac. You are spending too much time on the site. Time for a break. Why not take the weekend off. We'll be here when you get back. That is just TOO Funny. Good One! LOL!
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Permalink Reply by sesport on
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You would have to do a snapNOT of the play, in the complementary color of green (being NOT red/pink). Of course, there would be the enigmatic doNOT hole, too. lol
I know, I know, I'm easily amused. It beats bp medication, though.
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Permalink Reply by Skip Peel - Mineral Consultant on
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sesport. Please see my response to Mac above. You both need a vacation. LOL! Have a good weekend and good night.
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