I noticed a recent member (since November, 2009) had the comment "Encana attempting to force mineral owners to pay for pipeline" behind his name on "Whos Online". I thought I would bring this discussion back up and see if he had any first hand info to offer.
This looks just like something the company would put out to find out how everyone feels...they learned alot
the TTC was another great propaganda ploy to get every one to accept the I-69 expansions of ROW...it amazes me how many people have the no TTC signs on their fence only to help boost the propaganda. It's called win-win...the LO thinks they defeated the TTC and the TXDOT got their I-69 with no issues......
I know I'm just a dumb ole country boy but if the operator wants to build a pipeline and wants me to pay a share I'll be glad to as long as I also get a ownership share out of the revenues going through it besides mine.
Okay. I have knowledge of this. It is not paying for a pipeline. It is paying transportation costs. The problem is that Encana is charging mineral owners 21% of their royalties in transportation costs. Wells at these flow rates should be 10% or less (according to my lawyer). Some of the larger landowners got their lawyers and Encana agreed to reduce the percentage. (Encana changed their mind though.)
My lawyer told me this. He is representing few of the landowners. He wanted me to make sure when our royalties come in to check these expenses. I told him I would just send him a copy of my first stub. The extra cost could be for a pipeline, but it sounds like that part got a little twisted.
Please don't be mean. I am just sharing what I know.
ANY transportation cost is high unless the O&G lease specifically gives the lessee the right to charge back those costs - generally speaking, most leases do not contain such a clause that allows for deduction of such costs. There are several examples in recent history where lessees have either lost their leases and/or paid penalties to royalty owners for failure to properly pay royalties (i.e. for deducting transportation and other associated fees to deliver the product to a downstream market or high pressure pipeline interconnect.
I have not reviewed any of the new leases that have been tendered by operators in this play other than what my family has executed in the past 2 years - we do not provide such a option. But, it wouldn't surprise me if some of the operators have included such rights for their benefit (and the royalty owner's detriment). It is certainly worth challenging in court if not explicit in the lease agreement.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More