Replies to This Discussion

Permalink Reply by Larry G Smith P.E. on July 4, 2013 at 7:27

Well the AG has told me that If I can show FRAUD, they would look into the problems we are having. So, I take HIS word that Fraud is  crime, sorry. But to answer your reply, the fraud leads to theft of royalty money to many people.  No the clerks are just following orders.

• ▶ Reply

Permalink Reply by GoshDarn on July 4, 2013 at 9:11

Mr. Smith:

Good luck with your effort.  And thanks, yet again, for pursuing this.

I'm not a lawyer, but I think "intent to fraud" is a crime.  In other words, if there is "intent" to knowingly break the law, then it can be prosecuted.  But, as I also understand it, intent can sometimes be hard to prove.  So if it's an innocent bookkeeping mistake, then the court system may not view such errors as a crime.

Of course, I side with you since I'm a landowner and since there has been documentation of CHK's long history of cheating royalty owners.  So I'm sure CHK's home office is fully aware of the inner workings of their crooked leases and jimmied payout decks and actually instructs its worker bees to "intentionally" sidestep adhering to the letter of the law.

Say "hi" to the AG for us.  The lawyers there label themselves as a "reform" administration.  Well, if this is indeed true, and not just some self-serving rationalization to make themselves feel good, then they need to "reform" their own actions and thus protect La. citizens from such crooked companies as CHK.

Keep up the good work.

• ▶ Reply

Permalink Reply by Larry G Smith P.E. on July 4, 2013 at 7:20

Just received a note that Skip Peel had replyed to my post on here but when I tried to open the link, it said that it had been removed. I now have to wonder WHY. Skip, I think is a Landman. I used to trust people in this business but after my dealings with Landmen and Gas companies, I have a red flag up.  The last time I went to Pelican and went by the well site, I noticed that someone had installed a Cathodic  Protection Rectifier and am sure a deep ground bed on the well pad. The land owner should have been notified about this. But then we were never notified that they were going to drill a well on our section 34.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on July 4, 2013 at 9:41

Larry, sometime Internet connections interfer with replies being posted.  When that happens and only a portion of the reply has benn uploaded, it's better to just delete and start over.  Yes, I am a landman.  One who works for land and mineral owners.  Mostly research and analysis.  I don't work for the industry.  I've never taken a lease in my life. I have testified as an expert witness for mineral lessors in a LA district court.  I work with a number of O&G attorneys who represent land and mineral owners and by doing so keep up with O&G litigation.  I have some insight into the workings of state government as I have previously held a position which included lobbying the legislature and dealing with various branches of government.

There is no state regulation requiring notice to lessors or surface owners for the permitting and drilling of a well.  Notice is required for unit applications and for alternate unit well locations.  As to enlisting the membership of GHS to lobby the AG, I think that's a poor idea.  I certainly think the membership is a good source of information and documentation especially Henry who has long compiled royalty information from members.  Far too many are shall we say over zealous in their denunciation of CHK and other operators and don't do a particularly good job of making a cogent case and keeping emotions in check.  Getting the AG's help in this matter will be a challenge and even a well stated and documented case will have difficulty because of the politics.  Since you seem to have the ear of the AG I hope you will make a good case and get a fair hearing.  Good Luck to ya.

• ▶ Reply

Permalink Reply by Larry G Smith P.E. on July 4, 2013 at 10:45

Skip, am sorry if I stepped on your toes but the Landman/Company that we leased through was owned by a man that finished high school with my oldest son. I thought we could trust him but as it turned out, he was not to be trusted.  That is the big reason that I have the feeling that I do about landmen and also Attorneys. I have been contacted by Attorneys to do PE work on cases in my field. Before I will accept the work, I make it very clear that My findings will be presented straight forward regardless of who is right or wrong. I am not a Hired Gun, the majority of cases, they will decide not to have me look at it. Which is fine with me. I love my profession, Engineering and I respect our Code of Ethics and follow it 100% and will report any Engineer that I feel is not following the Ethics of our profession.  I will continue fighting for the rights of the royalty owners as long as it takes. We did own 100% of the oil and/or gas that is under our property, we signed a lease granting them the right to produce that oil and/or gas giving them 75% of the production and retaining 25% for the land owners. That 25% is supposed to be clear of any and all other charges, that is what we agreed to, as told to us by the landman. Now we find out that they sell the gas to one of their paper companies, etc.. That is to cover the cost of Laying the collection system, then if that is the case, we are financing the cost of construction, then WE own part of that collection system. That is how I look at this. I have a Cathodic Protection Company, started it in 1968 and have delt with Gas and Oil companies the entire time. CHK is the worst company I have ever been associated with. In fact, when all of this first started, a friend warned me not to do any work for CHK because it would be hard to get paid by them for the work. I should have remembered this when I was approched to lease my property. Sorry for going on like this but I get very upset when I see what is going on. The money from the lease is nice but I have and can do with out it. What upsets me is the number of people that need and are depending on that little check to have some kind of life. That property has been in my Dad's family for over 100 years, it was his birthplace. That is where his Dad died, so I have very good feelings about that property.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on July 4, 2013 at 11:15

Larry, my point is limited to making a case before the AG.  I understand your being upset about your personal circumstance but first you don't have the facts you need to make a case (I hope you get them before you have your meeting) and second if you make the wrong case (operator didn't notice land/mineral owner before performing cathodic work) your effort will be short and unsuccessful.  In regard to the latter, an AG staffer would look at you and say, "notice is regulated in the mineral code which is the perview of the legislature, the AG's office has nothing to do with that".  I have been privy to a lot of discovery in litigation regarding gahering charges and know that it is extraordinarily complex and time consuming to make a case.  I know of several that are in their 3rd. year of discover.  I doubt that vague accusations will motivate the AG to get into a legal tussle with an opponent as politically connected and powerful as the energy industry.  I wish you luck but just getting a meeting is the easy part.

• ▶ Reply

Permalink Reply by Larry G Smith P.E. on July 4, 2013 at 11:23

Skip, I could care less who installed the CP system, I do not do installation work. But I am not going to go talk to him half cocked so to speak. What I will bring will be hard facts that he will look at and he will do what ever he wants with it. But I will be backed up with good information. I am not worried about regulations, I am sure they cover their a** when it comes to regulations. The AG is not interested in "if " they are following the regulations, that comes under another department in the State.

• ▶ Reply

Permalink Reply by Dion Warr, CPL on July 9, 2013 at 7:37

Larry:

Not to needlessly inject myself into your dialogue with Skip, but the lease broker generally has no control over how royalty owners are paid or treated by their clients, what is withheld and deducted, or whether their practices are legal, correct or not.  He took a job with a paying client on a contract basis.  He offered leases on forms and riders that were pre-approved by the client at terms dictated by them.  If asked for his opinion, he probably gave the best answer he could based upon his personal experience and knowledge of the industry based upon his experience.  As you stated with the clerks, he largely did what he was told.  If he was told to give you the "cost-free royalty clause", he did and that's probably what he called it, too, believing that is what it was.  To the extent that his client has operated in its payment practices and chosen to interpret their obligations under those provisions is likely a horse of another color.

 

To what extent he acted in a professional manner towards you is for you to judge, but how you are getting paid for royalties is "far above his pay grade".  Unless he is operating your lease, the client is doing what it feels appropriate, the lease broker's opinion aside.

• ▶ Reply

Permalink Reply by Larry G Smith P.E. on July 10, 2013 at 5:20

A lease broker has knowledge of things that should be told to the person he is trying to get a lease from. I was told that they had signed just about every body in my section. To me that meant that the company he was representing had the majority of leases. Wrong, that was a LIE and very un-professional. I am a P.E. degree EE and specialize in the corrosion field and conduct myself in a very professional and expect that in other professionals.

• ▶ Reply

Permalink Reply by Andrew on July 10, 2013 at 6:30

Larry,

Clear-cut dishonesty is much different than knowing what a client might do after the lease is acquired. In the case of a particular company's compliance with cost-free clauses, I don't see how any broker would know what their client would do unless they had a long-standing relationship with the company where there was a pattern one way or the other - they could only guess.

Regardless, you're absolutely right about the bottom line: no matter what, a leasing agent is never allowed to lie in order to get a lease.

• ▶ Reply

Permalink Reply by Dion Warr, CPL on July 10, 2013 at 7:52

Larry:

OK, that ("I've signed just about everybody in your section") I would have a problem with.  That is a question that he could answer (or at least he volunteered so-called "factual" information) that record title later showed clearly was not.  I never endorse lying.  But if one doesn't have enough information, you have to be able to say that, if not offer to look into it and try to get you an answer, without it being a penalty.  If something is confidential, one should be able to state that without it being a penalty. If one is called to make a conclusion, he can only make one based upon the best of his knowledge.  (My guess is that your "cost-free" royalty clause reads like one, was called one, and he had no reason to believe that it wouldn't have been treated as such - but you can always ask). 

 

So let's throw this into a forum that is more in line with your line of work.  You design or design-build a pressure vessel equipped to handle certain stresses and attack (corrosion, chemical, or similar) or a protection apparatus designed to thwart same given certain specifications and representations by the operator as to how they will utilize the equipment and standard procedure.  After you have turned over your work to the operator, the operator later decides to take liberties with its procedures and utilization of said equipment which lies outside of a scope of use, maintenance and operation which was communicated to you.  As a result, said piece of equipment fails catastrophically, to the detriment of the client and other third-parties.

 

Should these people blame you, since you helped design and/or build the damned thing?

 

Or would you say (I would consider accurately), "I helped design and/or build something that would work within the scope as I understood it; if they chose to use it, operate it, or subject it to factors and environments outside of the scope and specifications as they were laid out to me, that's not up to me - I can't control what they do"?

 

In many cases, once the field broker assembles the prospect on the client's behalf, they have little or no control over how that client as operator or its successors conduct themselves while in possession of your lease.  Hopefully, if you've ever designed or built something for someone and then watched them run it into the ground well before its designed service life, that's a point that you can appreciate.

• ▶ Reply

Permalink Reply by Larry G Smith P.E. on July 10, 2013 at 11:48

Sir as a design Engineer, when I do a design, it states very clearly that any change in MY design, will null and void the contract of responsibility on my part.

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• 4
• 5
• 6
• …
• 8
• Next ›
• Page