Falsifying Production?

I think that the oil company that is holding our oil rights on production may be falsifying their production.  Is there a way to check that?

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Permalink Reply by John Goold on March 28, 2013 at 3:51pm

Typically it is lower.

Permalink Reply by John Goold on March 28, 2013 at 4:58pm

Generally the royalties are $120-$180/year they have never been much more then that for the life of the lease.

Permalink Reply by Gunner Ostergard on March 29, 2013 at 3:15am

Good information to know. Sounds like you are on the right track then looking at expenses of the well.  Also have you been to your states regulatory agency and asked for production records for the life of the well?  This is free and easy.  They may have lied about production in the last couple years but it would be interesting to see a gap in time were they admitted no production to the state.

Permalink Reply by Paul Martinelli on March 29, 2013 at 1:47am

It would be interesting to see how the company claims this well's interests on thier tax returns.......do the show a profit? can they be accessed?

Permalink Reply by John Goold on March 29, 2013 at 11:29am

I am going down to Marietta to talk to another lawyer tomorrow, will be interesting.

Permalink Reply by John Goold on March 30, 2013 at 9:24am

I went down and talked to the lawyer and I told him those production numbers and royalty checks, he said that isn't production.  I also went out to the wells and low and behold there is now production and machines to graph the pressure.  This is the first time there has been any pressure or production at the well in my memory.  The lawyer said $500/year worth of production at each well like the company claimed is not production by any definition and it is likely the company kept the production locked in illegally through the years so that when it came time to defend production the wells will show production.   The lease doesn't say payable production but the law pretty much defines the term production as payable production.  He is very familiar with the company and feels we may beat the lease.  I didn't know what a producing well looked like, sounded like or smelled like until today because there has been complete and total silence and no activity at the wells throughout the last 10-20 years or so.  I am suspicious the previous law firm we had just held the case for a while to give the company time to get things ready to fight us.

Permalink Reply by James Brink, Esq. on March 30, 2013 at 12:52pm

Good luck, John.  Like I said earlier in this thread, before I was excorciated, many marginal wells will now be defended as producing wells capable of holding leases by production.  We have seen a growing trend in this area and the only way you will prevail is demand an audit of the operator's records and seek the expertise of an oil and gas accountant who can state whether the wells were really producing at a profit at all.

Permalink Reply by John Goold on March 30, 2013 at 12:58pm

I agree James Brink, Esq.  I just want to state how helpful you and the others on this site have been.  The other attorney dropped our case stating that if the wells produce anything at all they are capable of holding the lease by production.  I learned about the term of payable production on this site.  I wonder how many other people have received incompetent or even corrupt representation and haven't sought second opinions.  It has been clear from this site that the laws and courts don't tolerate holding leases on production with wells that produce $200 worth of gas and/or oil per year.  This has given us hope. 

Permalink Reply by James Brink, Esq. on March 30, 2013 at 1:08pm

John:  From what you have posted, you should be in decent shape.  I am licensed in West Virginia and Pennsylvania, so I am not 100% certain what the law is in Ohio.  If you want to contact me via a friend request, I may be able to point you in the right direction.

Permalink Reply by John OBrien, landowner advocate on March 31, 2013 at 3:15am

James, 

Good to know you are not licensed in Ohio.  I was getting ready to recommend you to lots of friends here.  If it is OK. I will friend you, (I may have already, you might not have had time to OK it).  I and others need a trustworthy firm to help.  There have been firms  in our county who were not.

Thanks

Permalink Reply by Jimbo49 on March 31, 2013 at 4:56am
John, I am in a situation very similar to you. I live in Washington county Ohio. I wonder if you would be willing to share with me who the lawyer is you are working with in Marietta. We maybe dealing with the same lease holder. There might be strength in numbers. Thanks!
Permalink Reply by John Goold on March 31, 2013 at 12:53pm

There are lawyers that seem to either be ignorant of the laws or not ethical.  We were led to believe that any amount of production even $1/year of production will hold a lease.

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