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Permalink Reply by Steve P on October 25, 2012 at 7:23

I'm in that situation.  Encana has been making deductions from my royalty payments for transportation, compression, etc. - all of the things that my lease addendum prohibits.  I've put them on "friendly" notice via an email, and let them know that I'd be sending a demand letter, certified, return receipt if they don't stop and send me a refund for the prior deductions.  They have 2 more weeks to respond before I spend my $5 on the formal letter.

Did your issue get resolved easily, or not even resolved at all?

 

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Permalink Reply by mickiebyrd on October 25, 2012 at 7:55

Just got email today saying that they realize there mistake and will correct asap.  I have your problem with chesapeake and have decided to start fileing small claims court on them about every 6 months.  good luck.

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Permalink Reply by HBP on October 25, 2012 at 8:56

Your checks should be close depending on the unit and their JOA terms (joint operating agreement), but the amounts will rarely be exact since one may be deducting an item the other is not, etc... Even the gross can be different depending on a few factors, but yes, it should be "close".

As far as the no deducts clause goes, check and see if your clause is one that does not apply to costs from disinterested 3rd parties because many (or most) Encana units will be able to apply their 3rd party costs to you.  With CHK, we now know they will find a way not to honor a no cost clause regardless.

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Permalink Reply by Steve P on October 25, 2012 at 10:12

notwithstanding the differences in deductions, the checks aren't close - not only are the volumes different, but each has their own gas price (presumably hedged).  Interestingly, Shell does not include any deductions in my royalty payments so I think my clause is okay.

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Permalink Reply by full name on October 26, 2012 at 4:03

I had the same problems with Encana volumes being low.  I called the Encana royalty office and they said that Swepi paid on 1/2 the total volume and Encana paid on what they actually received and there was an imbalance.  They said it would be resolved in quickly.  After several 'friendly" emails with no results over a number of months.  I sent them an email stating that I would be taking additional measures to collect.  I called their attention to Louisiana mineral code sections 139 and 140 which allow for attorney's fees, interest on amount due, damages double the amount due and possible dissolution of the lease.  They issued me a manual check in three weeks.

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