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.
No reason for impeachment buddy. It's all just the Dems and deep state coup part three or four. 1. Spygate 2. Mueller 3. The whistleblower, but more leaker than whistleblower 4. Fakepeachment. Perhaps can even add another here with Stormy and her indicted attorney.
It's all anti Trump garbage meant for you.
Politicians on both sides and their families have been in the Ukrainian energy companies for a long time before Trump. Trump is draining the swamp by example by setting himself up by having Rudy not only work on the side outside of the State Department but far worse to blatantly in the open squeeze into the Ukrainian gas companies too. He is no less a crook than some of the worst politicians. He just isn’t as good of a crook and he is stumbling around accidentally turning the lights on and the corrupt status quo isn’t going to risk getting exposed.
Dan,. Seems to me like Trump is using his parsonal attorney as an extension of himself to represent his presidential interests directly since there are so many leakers and political hacks in the State Department whom are anti Trumpers.
I’m sure he is but it is his very own state dept. I hope you are right and hopefully his interest was benign but it is appearing more everyday that the hiding may be to hide more corruption.
Yeah, this site sucks now, bunch of wackos pitching conspiracy theories they heard about on youtube or something, only like 25% of the posts are about oil and gas. Get this trash off here.
Military Tribunals Executive Order:
Here is the Executive Order from 2002 signed by Lil george 911 Traitor bush and updated March 1st, 2018 for 2019, by Our President Trump. george could never have dreamed that he would meet his end using this Executive Order he signed into law.
Read it and weep All who failed to keep the oath you made to God, to do what was best for the Citizens you chose to ignore rather than serve & protect.
Executive Orders can be written by any President, but to date Our President Trump has done everything exactly as I would have done, this enables me to see that these documents will be used to put an end to Corruption as Our President promised.
Another Promise Made, Promise Soon To Be Kept.
The future is easy to see if you know where to look.
Give it up, man. Nobody wants to see this same old stupid nonsense again.
Every generation has a percentage of people who have a twisted sense of nostalgia that they think the good ole days were better, even though our parents had to walk uphill both directions to and from school when it was minus 40. They can fear the new and changing world seeing it coming at them faster and faster. But.....I do miss the good old days before the internet back when cults had to recruit their flock of sheep in person.
Now a days they have a pill for everything.. The problem comes when you find out the cure is more dangerous then the disease! Family picnics back then instead of a bunch of druggies staggering all over the place.
The Oil and Gas business can be a bit confusing when attempting to define how Landowners are being "abused', so lets try using a simplified yet true analogy using a Dairy Farm.
If Chesapeake Energy went into the Dairy business, this is what a Dairy Farmer would experience.
You just signed a 20% Gross contract with Chesapeake Dairy to sell your milk. They take the raw milk and turn it into the final products then sell them in their Company owned and operated stores.
As the producer, all you have to do is call Chesapeake when you have 200 gallons of milk stored and ready to ship.
Chesapeake Marketing shows up, takes your milk and tells you that a check will arrive at the end of the month.
Just like their O&G operations, Chesapeake doesn't actually transfer the title of your milk to their Marketing company since no money changes hands, and there is no record of a sale anywhere in the US. The Marketing company gives you a price well below market value for your milk since they claim that they now own your milk.
Now that you no longer own your milk, Chesapeake charges you for all transportation of their milk, all energy used to pasteurize and separate their milk, bottling their milk, shipping their milk to their stores, state taxes on their milk while in the store and any other cost to Chesapeake to sell their milk.
After having notified Chesapeake of the 200 gallons of milk in your tanks ready for pickup 3 times during the month, Chesapeake tells you that you produced 15 gallons, 3 gallons and 10 gallons during the month. The first batch of milk was grade A and you were paid well under the market value, while the following 2 shipments during the month were declared low grade and reduced by 20% due to lower quality.
At the end of the month you get nothing since you haven't earned the $25 due before a check can be written. It may be a few years before you make $25.
State & Federal officials, lawyers, judges, and all who ignore Chesapeake's activities, receive free milk delivered at their door for life. Please don't mess up their good thing by complaining.
Encino Dairies buys out Chesapeake Dairies and shows up at your farm and tells you "this operation belongs to China, the US Owes China, so now we are going to take it all, you get nothing". You will receive a News Letter each quarter to show our good will.
The executive orders provided in past posts, tell me that corruption in the Domestic Oil and Gas Industry will end soon.
Forget the pain of being stolen from monthly and get happy. This will mess up those who love the negative energy that suffering humans produce. I suspect this fact will be included with the Truth that has been hidden from us for too long is revealed to all.
Looks like someone needs to explain to the soon to be ex-Encino spokeswoman Jackie Stewart that the royalty Chesapeake was paying was cut by 90% by Encino plus the Total E&P 25% holdings in the 4 counties her company is defrauding is not being paid, after Encino informed everyone that they would be paying the Total E&P royalty that Chesapeake has always withheld from us. Looks like they couldn't resist keeping 25% of what is due.
This is called Corruption, and to the point of being Treason since they are working for China.
Encino Jackie is waiting for the courts, while I'm waiting for the Military Round Up of EJ.
My bet is with the Military tucking away Jackie in a small cell for Corruption at GITMO. There's no time left to wait on another out of court settlement fraud against US Landowners.
I'll have that Encino News Letter GITMO Edition finished and ready to send out. All I need is a final destination for each of Encino's losers as they are locked up at GITMO.
With the EPA loosening up on their use rules, there will be asbestos copies for the higher ups to take with them when they are terminated for Treason.
China is in Our US Domestic Oil & Gas by way of Encino and doug lawlers Chesapeake Energy. Supplying Energy to Our Enemies during a time of War (since 2002) is a Hanging offense.
I have plenty of popcorn and motion sickness pills in case watching these fraudster take the drop from the scaffolds with an abrupt stop, upsets my tummy. Seeing justice served probably won't bother me much.