Federal lawsuit alleges company is significantly underpaying royalties
A new lawsuit accuses Encino Energy and its affiliates of underpaying oil and natural gas royalties in Ohio.
Attorneys for landowners in Carroll and Columbiana counties filed the complaint Friday in U.S. District Court for the Northern District of Ohio.
Encino Energy, Encino Acquisition Partner Holdings, EAP Ohio and EAP Operating are defendants in the proposed class-action lawsuit. The case is assigned to Judge Benita Y. Pearson in Youngstown.
An Encino spokeswoman said transparency and fair treatment were the company’s top priorities, and it shares detailed information about royalty calculations with all of its partners.
The lawsuit concerns leases landowners signed with Ohio Buckeye Energy or Chesapeake Energy from 2010 through 2012. Ohio Buckeye Energy later became part of Chesapeake.
Last October, Encino Acquisition Partners bought Chesapeake’s Utica holdings in Ohio for $2 billion. EAP is a partnership between the Canada Pension Plan Investment Board and Encino Energy, a private oil and gas company based in Houston.
EAP’s purchase included 900,000 acres and approximately 900 wells, with related equipment and property. Encino Energy’s Utica office is in Louisville.
After the purchase, the Encino defendants began to significantly underpay royalties to landowners, according to the lawsuit.
William G. Williams, an attorney for the landowners, said his clients initially couldn’t wait for Encino to take over because Chesapeake had been making large deductions from their royalties, a practice that is the subject of another lawsuit.
High expectations changed to despair and disappointment when the landowners got their first Encino royalty checks this summer, Williams said. The payments were anywhere from 50 to 90 percent less than what Chesapeake had been paying.
“The drop has been dramatic,” said Williams, an attorney with Krugliak, Wilkins, Griffiths & Dougherty Co. of Jackson Township, which is representing about 140 landowners in the royalty dispute.
The landowners named in the lawsuit — Zehentbauer Family Land LP and Hanover Farms LP, which own land in Columbiana County, and Evelyn Frances Young, a United Kingdom resident who owns land in Carroll County — were part of large landowner blocs that negotiated standard leases with drillers with help from the Krugliak law firm.
The leases required the company to pay a royalty to landowners based on the gross proceeds from the sale of oil and natural gas produced by the wells. The only deductions allowed were for government taxes and fees, according to the lawsuit.
But the Encino defendants have been deducting fees for gathering, processing, dehydrating, transporting, marketing, compression and other activities, according the lawsuit, which alleges damages in excess of $5 million.
The Krugliak law firm and Murray and Murray Co. of Sandusky are representing the landowners.
The same plaintiffs and attorneys filed a similar royalty lawsuit in 2015 against a subsidiary of Chesapeake Energy and its affiliates. That case is pending before Pearson in federal court.
In an email, Encino spokeswoman Jackie Stewart stressed the disputed leases didn’t originate with Encino.
“These leases contain provisions that have been under review by Ohio federal courts for a significant amount of time prior to our arrival in Ohio,” she wrote. “We are awaiting the courts’ ruling on these provisions before these matters can be clearly resolved.”
She also noted the natural gas price is down 20 percent, while ethane and propane are worth almost half what they were a year ago.
“The changes seen by landowners in royalty payments have largely been driven by changes in production in some cases, and in significantly lower commodity prices in all cases,” she wrote.
She encouraged royalty owners with questions about their leases or royalty calculations to contact the company.
in your previous posts you claimed in your omniscient for telling of a great corruption cleansing, that it would happen by October. Dude, it’s November. The Q tinium and your corrupt leader have forsaken you once again. Your popcorn got a be about as stale as your posts. Put your meds in that popcorn bowl and sit back and chill. The corruption hearings are about to begin, just not the ones you thought.
Who doesn't know that the Hammer Super Computer ordered by the Kenyan (Traitor 44 soon to be the Late Kenyan) has been collecting All communications between Chesapeake, Encino, and those in Ohio who have conspired to defraud the Landowners of Ohio and more recently the Counties of Harrison, Carroll, Columbiana and Jefferson, by teaming up with Encino.
The NSA and Military Intelligence took control of the Hammer and like Q says "We Have It All". Sorry but Q is real.
My bet is that this was an attempt to leave Landowners unable to pay their Real Estate Taxes so foreclosures could ramp up a bit more, transferring the Land and potential wealth that goes with it to "Certain" individuals. These "Certain" individuals, some who have served in Washington and picked up bad habits from the Washington swamp, are royally screwed to be sure.
Encinoans & Chesapeakans don't have a snow balls chance in Hell of missing out on GITMO. You can only hope for a non-treason conviction, but some that you have stolen from have put in an early request for consideration of the death penalty due to the level of theft across OUR NATION.
Examples will be made of the very worst offenders as a warning to those in the future that crime doesn't pay.
Landowners & Patriots EVERYWHERE, don't forget to be Happy and Pray for Our President, Our Military, the NSA, and Militia as they remove corruption from Our NATION, and return control of Our Federal, State and especially Local governments back to We The People. No More Real Estate Taxes, EVER!!!!
It is a great idea to pray for our president Ron. He sure needs it! Not because his agenda for making the country a great nation again is the way to go however.
Prayers are needed for him to realize that he must sit down and LISTEN to his advisers instead of calling everyone that he disagrees with nasty names and trying to bully them into compliance with him!
Yes, let us pray for the president.
Let us pray that he always has a hot porn star to grab by the pu**y
Let us pray that the women and children invaders on the southern border continue to be separated and kept in cages.
Let us pray that the evil Hillary receives the punishment she deserves, her legacy of fighting for women and children to have better health care is truly one the great evils of society. And don't even get me started on her e-mails, they practically destroyed our great nation! Lock her up!
I could go on and on.......
But finally, let us pray that all the depressed, insecure, undereducated fake christians and cult members someday get the help they need, that they will stop constantly blaming others for their own mistakes/misery, and can eventually go on to become productive members of society and also, just maybe...…..eventually acquire some basic human decency. (this one requires ALOT of prayer)
Oh, by the way. To the person (and I am using the term very loosely) who posted (and I quote) "Traitor 44 soon to be the Late Kenyan".
I am sure you are a decent man of god who truly cares about his fellow man, but...…..No, I don't think so, any one who would post this on a public forum is truly a sick, twisted individual.
To everyone else: Sorry, but I started this thread, and now there is some f**ed up troll shi**ing all over it.
Trying to stay informed on O&G topics but reading through the conspiracy theories, political opinions and insults between members is an unproductive waste of time.
I just received the bankruptcy notice concerning Chesapeake. A contingent claim may or must be filed with the court for unknown debts related to false or underpaid royalties which may have accumulated over the years. Anybody have any knowledge or willingness to pursue this?
My neighbors and I also received that notice. I'm sure there will be people filing against CHK over past shortfalls; Lord knows they cheated enough people. I won't be one of them, as they actually paid me according to the lease. I'm sure they were in my pocket to some extent, but they weren't blatant about it. It may not only be Chesapeake filing bankruptcy. I'm hearing from several people that Encino's royalty checks are bouncing. Is this happening to others out there?