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Permalink Reply by Harold5011 on April 26, 2009 at 15:15

thanks KB - I relize its pretty tricky - one part of the letter would be the demand and the other part would be advising the operator of their failure. Over the years I've seen a good form for the letter (that seemed to be bullet proof), but I can't find it for the life of me. I also relize that this letter is totally different than the failure to pay letter that would be sent if the landowner is leased -

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Permalink Reply by Harold5011 on April 26, 2009 at 15:26

"While 30:104 only provides a de minimus monetary penalty, remember, these reports are (a) required by law; and (b) are "sworn." There is a plethora of law that punishes harshly those who do not tell the truth under oath."

The biggest problem I've found from the unleased owner perspective is the operator attempting to deduct costs that are not deductible in this situation - such as lease bonus costs, completion expenses in other sands, absurd overhead and pipelines to nowhere, ignoring that the well made payout from other zones & deducing all injection well costs when it should be pro-rated alot. And no one semes to understand that payout is to be determined by the Commissioner (and the operators do not want to go three), and payout for unleased owners is not determined the same way that WI owners might ordinary difine payout. Even the big boys have lots and lots of trouble (and give up trying or may walk away from it all) in getting the operator to play fair. There are very few people who are good at knowing from the detailed accounting which costs are reasonalbe and which are not, and those guys time is expensive.

Need a form - anyone

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Permalink Reply by Harold5011 on April 26, 2009 at 17:08

KB -again thank you for the pointers ---

The well has made payout X 3. Is there any reason that the demand for payment shouldn't be made in the same Certified Letter that advises the operator that it has not sent the sworn detaild accounting and then requesting same (along with the 90 day production/operating expense reports) ??? Or should this be a two step process?

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Permalink Reply by danny meyers on April 26, 2009 at 17:26

What about Browning v. Exxon Corp.,La.1994, 848 F.Supp. 1241, affirmed 43 F 668. Mines And Minerals 92.80 " Determination that notice by Certified mail was not sufficient to comply with Louisiana statutory requirement for notice by registered mail did not lead to absurd results, in light of clear differences between certified and registered mail, and in light of specific types of mail required by various notice statues which demonstrated state legislature's cognizance of differences between types of mail." Westlaw LSA-R.S. 30:103.2

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Permalink Reply by danny meyers on April 26, 2009 at 17:31

Is it certified or registered?

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Permalink Reply by Harold5011 on April 26, 2009 at 17:58

This one will be certified - I think the law was changed a number of years ago from registered to certified.

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Permalink Reply by Harold5011 on April 26, 2009 at 17:37

Here's my first draft of the letter - names, unit and well name changed or omitted - probably lots of typo's - hours late - any suggestions, edits or comments would be most appreicated - please don't LOL-

Re: Demand for unpaid proceeds of production from _____(Serial Number ________), ______________ Field, __________Parish, Louisiana (hereinafter referred to as the "X well"); Written Notice of failure to comply with the provision of La. R. S. 30:103.1; Written Request for a sworn, detailed, itemized, statement of the costs of the drilling operations for the X well; and Written Request for quarterly reports as to the X well until cessation of production.

Dear Sir/Madam:

I am writing this letter in regard to the X well. I own a ___________ interest in and to the following described land (herein after referred to as the "subject land") in ________________ Parish, Louisiana, to-wit: ___________________________________

My _______ interest in the subject land is unleased, having been unleased continuously from the spudding of the X well to-date. _____________ has been the sole operator of the X well. The X well is the designated unit well for a compulsory unit known as the _____________, ________ Field, _________ Parish, Louisiana (hereinafter referred to as the "A RB SUC").

The A RB SUC was created by Louisiana Department of Conservation Order No. _____ dated __________ and effective ____________________, the. A portion of the subject land (______ acres, more or less) has been designated as Unit Tract No. ____ on the official unit survey plat for the A RB SUC.

I have not received any compensation (or any accounting) whatsoever for production from the A RB SUC (including the proceeds from any production attributable to the X well) to this date.

In summary, _____________ has failed to pay the proceeds of production attributable to my __________ interest in production from or attributable to the X well.

Pursuant to La. R. S. 30:10 A. and other applicable law, I hereby demand that within thirty (30) days from your receipt hereof, you pay to me all proceeds of production from the X well that is due my ____ interest in the subject land, along with interest at the judicial rate on all sums due. Please be advised that should you fail to timely pay the sums due, I fully intend to vigorously pursue all of their legal remedies to recover said sums.

This letter also constitutes my written notice by certified mail to ____________________ calling your attention to your utter failure to comply with the provisions of La. R. S. 30:103.1 as to X well. In this regard the operators and producers are to report (within ninety calendar days from completion of the well) to the owners of unleased oil and gas interests ("said owners") included within a drilling unit a sworn, detailed, itemized statement of an initial report containing the costs of drilling, completing, and equipping the unit well.

Further, after the establishment of production from the the X well, under La. R. S. 30:103.1 the operators and producers are to report (but have not reported) to said owners by sworn, detailed, itemized statements quarterly reports which shall contain the following: (a) The total amount of oil, gas, or other hydrocarbons produced from the lands during the previous quarter; (b) The price received from any purchaser of unit production; (c) Quarterly operating costs and expenses; and (d) Any additional funds expended to enhance or restore the production of the unit well. La. R. S. 30:103.1 further requires that the operator and producer report the required information (i.e. the reports set out or in this paragraph above) within thirty days of such information being obtained by the operator or producer, or in the next quarterly report, whichever due date is later.

I further point out that La. R. S. 30:103.1 provides that said reports shall be sent by certified mail to each such owner who has requested such reports in writing, by certified mail addressed to the operator or producer.

Accordingly, this letter is my request, by certified mail addressed to ________________, that __________________ send to each of them, at the below listed addresses, both the initial report and the quarterly reports (as set out in the preceding paragraphs) and that the quarterly report hereafter continue being sent quarterly until cessation of production.
________________
________________
________________

I also remind you that La. R. S. 103.2 provides that "Whenever the operator or producer permits ninety calendar days to elapse from completion of the well and thirty additional calendar days to elapse from date of receipt of written notice by certified mail from the owner or owners of unleased oil and gas interests calling attention to failure to comply with the provisions of La. R.S. 30:103.1, such operator or producer shall forfeit his right to demand contribution from the owner or owners of the unleased oil and gas interests for the costs of the drilling operations of the well."

Sincerely,

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Permalink Reply by Harold5011 on April 26, 2009 at 17:10

No - but we haven't yet sent the operator the letter by Certified Mail requesting it. That's part of what I'm working on tonight.

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Permalink Reply by Harold5011 on April 27, 2009 at 14:42

Done - I appreciate all the pointers from the board members. Harold

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