Replies to This Discussion

Permalink Reply by William Howard Pritchartt on July 7, 2015 at 18:08

You are very welcome and good luck to you.

• ▶ Reply

Permalink Reply by Krkyoldhag on July 7, 2015 at 11:44

I am with Samson (KKR) and Itochu just "sold" their (25%) almost 3 billion investment into it for $1  ..Does that mean that the other 3/4 of Samson is worth $3? 

From what I read KKR's troubles with debt re Samson is not from spending on operations ..but simply they  paid too much to begin with.

Wonder would it be restruction (reorganization) or could the creditors demand liquidation?

People here on the site that knows their lease history..Placid bankrupted

(again had nothing to do with operations but b/c Bunker Hunt tried to own all the world's silver)  and pieces (leases) were auctioned off..Samson bought a lot of those old Placid leases as did other operators..that was when it was just oil. 

So now KKR buys Samson for Billions. 

Itochu says they won't notice this sale of 3 Billion for $1 because they have already written it off.  How did they do that?  They only owned it for 3 years?

And has KKR done the same thing?

If so who lost money in these moves?

Still waiting to see if I have a lease or not and there is NO information out there about how this progressing.

Hope all the operators can hold on..and make a come back.

If any of you have ideas about what going to happen be glad to read it here.

• ▶ Reply

Permalink Reply by Leo Schumacher on July 7, 2015 at 12:17

My very limited understanding of accounting...

If a company pays too much for an asset and they write down its value, the company is the entity which lost the money.  That would affect the company owners, which can be private owners, or shareholders, if a public corporation.

Writing down an asset because it was overpaid, it is different than when a company owes debt.  When debt is owed, the company is obligated to pay it.  If the company files bankruptcy, a court will review the loans and assets, and determine which creditors receive the company assets, in a priority order.  Senior secured debt is tied to a specific asset.  Senior unsecured debt is next in line.  Unsecured debt, which I believe is what unpaid reoyalties would be, is last.  Determining the proper value of the bankrupt assets will be very important.  If the assets are valued more highly, then more creditors can receive some of the assets.  If the assets are valued for less, it can eliminate and / or reduce the amount a creditor receives.  The value of the assets can be very highly subjective.  If the asset is acreage, the judge might order its sale, and the proceeds distributed.  The bankruptcy proceedings can get complicated.

My worry, again, is that companies continue to produce minerals, and they may even know they have no intent to pay for them. Many E&Ps have a very long lag from production to payment.  In my situation, the E&P has two large horizontal wells online since January and have made no payments.  Their debt to me is quite significant.  I have written to them multiple times to inquire about the well status and division orders, and they refuse to reply.

• ▶ Reply

Permalink Reply by Gale on July 7, 2015 at 14:39

Leo, these are my fears with Samson now. I believe them to be producing and only paying royalty owners a fraction of what they are producing with no intent to ever pay for what was produced. From what I've read they are in bad financial trouble and it just doesn't look good to me any way you approach it. I'm not sure exactly what to do if anything at this point. Any suggestions are welcome.

• ▶ Reply

Permalink Reply by William Howard Pritchartt on July 7, 2015 at 14:59

First I suggest you look at what I just wrote concerning this matter.  Next I suggest having an attorney to copy and paste what I wrote with a few of his own comments along with code and statute to back up his letter demanding immediate payment in full to avoid criminal charges.  One letter should not cost much from the attorney and smart money says it will get you your $.

Who is Leo?

• ▶ Reply

Permalink Reply by Leo Schumacher on July 7, 2015 at 15:31

Hi Gale,

I asked my attorney for guidance.  William provided some helpful information with his posts. It is good to know that the operator cannot allocate royalty payments for other purposes.  Because my exploration and production (E&P) company is a private company, I cannot view their financial situation.  Just knowing the debt levels of many other smaller companies and the current lack of payment makes me want to ask the right questions and get the proper answers.  It is sad when the E&P is not cooperative to provide required information, so I must ask my attorney to help.

Leo

• ▶ Reply

Permalink Reply by Krkyoldhag on July 14, 2015 at 1:59

I wonder if mineral owners could use the courts locally to nip some of this unpaid production?  I know a woman who camped out at the gate to her wells and took pictures and noted each tanker that came thru.  She then compiled a letter with all this info and sent it to the company..got her checks due her..or what she could prove was due.

Could an individual file a "lien" against a producer and get an injuction or stop activity order thru a local court? 

No matter how a producer paints taking minerals and not paying for them..its still theft.

Maybe its like the olden days when a few East Coast families bought, sold, liquidated stores...Within 5 years store A could be sold and liquidated five times passing ownership on and taking on different ones..

Or is it like the Uranium deal Hillary is supposed to have negotiated?  Since each of these producers are publicly held could it be that these minerals are owned now by foreign people?

Wish Tom Clancy was still writing books..He could explain all this in fiction.

• ▶ Reply

Permalink Reply by William Howard Pritchartt on July 8, 2015 at 9:02

I have just come into information I was not fully aware of in the problem of operators nefarious practices in properly paying royalties owed to the royalty owners from production sales.  This is much larger in scope than I ever imagined for many others having the same problem.  I spoke with a geologist in Shreveport this morning who briefed me on the situation in north Louisiana and had lunch with a company landman here in Houston about this same ongoing issue in Texas.

[edited to comply with site guidelines]

• ▶ Reply

Permalink Reply by Gale on July 14, 2015 at 14:09

I sure would like to hear more about this William Howard Pritchartt. Not certain the site will allow this but I think private emails would be allowed and I'm assuming it can be generated from my profile.

• ▶ Reply

Permalink Reply by Leo Schumacher on July 14, 2015 at 14:13

I also follow the Go Marcellus blog, and this is also a major problem in Ohio, PA, and WV

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• Next ›
• Page