PPA's-Prior Period Adjustments

Has anyone had Petrohawk/BHP send them prior period charges adjusting for severance, restoration fee, External Treating, External Gathering, External Transportation/MF, AND External Fuel? It was sent in June 2015 and the adjustments go back to March 2010. We were forced unleaded mineral owners due to Petrohawk walking on bonus offer. Would it be different if we were royalty instead of unleaded and can they go back that many years?

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Oil & Gas ProPermalink Reply by Nixon Dow on February 11, 2016 at 12:37

As a Royalty owner this applies:

Art. 3494. Actions subject to a three-year prescription 

       The following actions are subject to a liberative prescription of three years:

 (5) An action to recover underpayments or overpayments of royalties from the production of minerals, provided that nothing herein applies to any payments, rent, or royalties derived from state-owned properties.

However, as an "unleased" mineral owner in a Haynesville Shale unit you have been you have been forced into what is referred to as "compulsory unit". LA R.S. 30:9 & 30:10 sets the default rules and rights each party has under this "compulsory unit". This basically creates what we call a "quasi contract" situation between you and the operator of the well. Contracts (and quasi contracts) have a ten-year prescriptive period. My understanding to this point is that both you and Petrohawk(BHP) have the right to reconcile and make post adjustments on any production within ten years.

Permalink Reply by Cayman Bum on February 11, 2016 at 12:49

Thank you Nixon. That is what I was wondering. Working with attorney to get some of it corrected now. Just shocks you when it goes back that far and is that much but have found a few more mistakes. Just have to watch every check detail close.

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