FYI Regarding TG Natural Resources (TGNR)
Fairly recently there have been posts and replies here about owner issues with TGNR, one of them being me. I want to briefly share my recent TGNR experience as an FYI for other TGNR owners who may have had similar issues.
For the past 8 months, I've been trying to transfer ownership regarding a well my sister and I inherited in 2010 currently managed by TGNR. Very long story short, I can say, unequivocally, we have documented, legal proof of ownership in this well but never received royalty payments, and was told years ago it was plugged and abandoned.
This is one of three wells we inherited, all under the name "Kangerga", all managed by TGNR who currently pays us royalties on the other two wells.
I discovered this past spring the well in question has been continually active and producing for decades. I contacted TGNR who at first was fairly responsive. They provided their requirements, which I complied with, and I've provided ample further documentation verifying legal ownership. TGNR has verified they have all required documentation.
After 8 months, multiple emails and calls, and even a "demand" fax, I have been basically ignored. No transfer yet, not even so much as a specific update. I used to get a reply here and there. Once in awhile, a return phone call. Today, I get nothing. The only response, when I'm lucky to get one at all, is: "We have received your documents and forwarded them to our Houston team."
Just yesterday, my attorney sent a demand letter via registered mail. I'm realistic and not expecting anything at this point, just hoping. I've been through the transfer process many times on other wells. So, although I'm just a lowly layperson in the overall scheme, I know enough to know when I'm being taken advantage of. Fingers crossed.
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Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
Jimmy, the sale of Rockcliff to TGNR may have some bearing on your issue.
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Permalink Reply by Jimmy Hamiter on
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Thanks for that heads up. So that would mean some sort of transition issue causing delays? And/or not being legally allowed to speak about it, that sort of thing?
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Permalink Reply by Skip Peel - Mineral Consultant on
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When a sale is imminent, the lawyers and the accountants like things to stop as much as possible while they perform their review and work through getting all parties to agree that the due diligence is complete. The fewer moving parts, the better that those tasked with due diligence like it. This is a $2.7 deal with four major parties that must sign off on the transaction. Mineral lessors and working interest owners will need to exercise patience. Keep your records in order and be ready to engage when the time comes.
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Permalink Reply by daddy bill on
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Skip, unless you have recent information on TGNR acquiring Rockcliff the original proposed acquisition has been dead for over a year due to low gas prices.
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Permalink Reply by Skip Peel - Mineral Consultant on
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The article announcing the sale that I posted on the Main Page is dated December 15, 2023. So it looks like the sale is back on.
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Skip, I am late to the party. I had not read your recent post of the recent article renewing the acquisition. I have royalty with both TGNR and Rockcliff and there is no comparison,Rockcliff's post production charges are very reasonable and TGNR's are very high. I also had working interest with TGNR which was finally resolved by invoking the Operating Agreement relative to the operation of uneconomic wells. TGNR is Commingling Haynesville gas with Cotton Valley gas and sending it through processing the result is essentially recovering no product but suffering an extreme amount of shrinkage on the royalty statements. This acquisition is not good news. These people are hard to deal with.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Sorry to hear it, daddy bill. I have a number of clients with Rockcliff wells.
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Thanks again for the added clarification, Skip!
I'm in advertising/marketing and have dealt with pre and post-acquisition communications many times. I know the O&G business can be unique. However, they could have easily sent some sort of "boilerplate BS" like: "Your transfer has been delayed due to changes within TGNR that will ultimately benefit all TGNR owners. Please know that we will give this priority attention once these changes are fully implemented. We are sorry for the inconvenience."
Hey, it's better than the owner relations strategy they've chosen: "keep 'em in the dark".
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Permalink Reply by Skip Peel - Mineral Consultant on
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You're welcome, Jimmy. The O&G business is about as far from the business world of advertising/marketing as one can get. Once a mineral owner signs a lease and production is established, they have little power. It's not like they can transfer their mineral rights to a competing O&G company or opt out of the contractual relationship. The business is arcane on purpose and bears little resemblance to any other business with which I am familiar. Oil state regulators are quite chummy and cooperative with the industry and states attorneys general are of little help when mineral lessors feel cheated. The industry is extremely litigious and the courts favor and protect them. Keeping you and all their other mineral lessors in the dark is the industry's standard operating procedure. Squeaky wheels get tired pretty quickly and shut up.
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That all makes sense, unfortunately.
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Permalink Reply by Skip Peel - Mineral Consultant on
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I have pushed back on the industry mistreating and out right cheating my clients for years with only modest successes. The deck is stacked in their favor.
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Permalink Reply by Skip Peel - Mineral Consultant on
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For those who are interested in how the industry hides the ball with the help of state regulators, here is my story of lobbying the Office of Conservation to enforce their own regulations.
The most critical document for a mineral lessor with Haynesville Shale production, outside of their O&G lease, is their unit survey. The survey lists the acreage of the lessor's tract or tracts and the total number of acres in the drilling unit. The math is simple for any lessor to calculate their eight digit royalty fraction if you know the number of acres they are credited with, rightly or wrongly, and the unit acres. Otherwise the eight digit fraction means nothing to those receiving royalty income.
The Office of Conservation has a long standing regulation that operators must submit a unit survey within 90 days of first production in a unit. Although a unit survey is required as part of a division order review that is completed before royalty is paid to lessors, Haynesville Shale operators were not submitting them in a timely fashion for the first ten years of the play. The state O&G database, SONRIS, is quite user friendly for anyone with basic computer/internet skills. After submission and upon approval, unit surveys are entered in the database and available to anyone at no charge. The state was doing nothing to enforce the regulation.
I became frustrated with the lack of unit surveys in the database and spent the 2018 Christmas to New Year holiday researching the missing unit surveys. There were 850 delinquent surveys!!! Many of which were by then delinquent for nine or ten years. I started writing letters. First to the Office of Conservation department heads, then to the Commissioner and finally to the Secretary of the Department of Natural Resources. I received no responses. I'm sure that those bureaucrats are used to ignoring mineral owners until they go away. I wasn't about to go away. I then wrote to the governor's office and got a response. Shortly thereafter I got a letter from the Office of Conservation. Seems John Bel Edwards, once aware of the details and importance of the situation, directed the bureaucrats to send compliance letters to all operators with delinquent unit surveys.
The compliance orders required that operators of Haynesville Shale drilling units submit at least 12 units surveys per quarter, 48 per year until such time as they had no more delinquent surveys. This kicked over a really big ant pile and the ants were not happy. The regulations were clear and the governor stood behind his order. Today there are still a handful of delinquent unit surveys but the vast majority are now entered in SONRIS. I encourage every mineral lessor with Louisiana Haynesville Shale production to get a copy of their unit survey(s), check their tract acreage, do the simple math to compare to their eight digit royalty fraction and to contact the Office of Conservation if their survey is not on fie.
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