Keeping Aubrey honest

So, realizing that to keep Aubrey and clan honest as far as royalty payments and deductions, I have sold a portion of my HBP acres to Bounty.   This  was by way of an old 1/8 lease still in effect where nothing has been taken out of royalties..   My hope is that since AEP now owns the deep rights on my farm, that if he (Aubrey ) drills there, that the good folks at Bounty will be keeping an eye on the particulars of proper payments.  Do you think that might work?

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Permalink Reply by bo boboski on July 27, 2014 at 6:53am

That may be the ticket if you are suspecting foul plsay on your royalty payments; sell a % of them to a company that wont allow it, or at least keep a watchfull eye on it. Any more thoughts on this?

Permalink Reply by evan on July 27, 2014 at 7:42am

That's a good thought but likely than Bounty will end up selling it to Okki Energy ,which is Aubreys company also.  And if they don't sell and keep it , it's very unlikely that you will receive the same amount in royalties as Bounty.  To many easy ways for them to cheat you..

Permalink Reply by Joseph-Ohio on July 27, 2014 at 9:26am

I think there are too many ways to cheat landowners in ANY scenario.

Seems to me the systems / rules are set up to actually encourage cheating the landowner.

All as always only IMHO.

Permalink Reply by Harry E. Rose on July 27, 2014 at 10:21am
JO, I agree and tbe way to stop it is for landowners to see their state rep. and senaters.
0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 27, 2014 at 3:31pm

Notice that it's the Attorney General of the state where the theft is taking place that files the criminal charges. For instance PA & MI Attorney Generals filed criminal charges against CHK.

The AG enforces the laws of the state and protects it's citizens. Look up the AG in your state and you'll see a form for filing a complaint and an AG Hot Line for call ins.

If you check your state laws on theft you'll find a law that producers are breaking.

If you need help, I just finished my Royalty Statement Theft Summary to be submitted to the Ohio AG. I was new at reading royalty statements but now with help from others, I know where to look for the theft, and how to package the complaint.

That first royalty statement stung but now I feel more positive with some momentum in my favor.

At least the Ohio Attorney General won't be able to say no one told him about the theft and let it run for years like in PA.

Let me know if you have something I can help you summarize.

I don't mind helping others and who knows, we could change the O&G royalty world as we know it today. The O&G Companies are breaking the Theft Laws in a multitude of ways.

The AG will be the one to eventually stop the theft, which is business as usual for the O&G Companies.

Permalink Reply by Joseph-Ohio on July 27, 2014 at 3:35pm

Don't make me laugh.

Permalink Reply by Joseph-Ohio on July 27, 2014 at 4:48pm

IMHO, in Ohio, the laws / codes / statutes / rules / regulations pertaining to Oil and Gas development and production in many important ways are leaning in favor of the Oil and Gas Exploration and Production interests and not in the interest of protecting landowner rights / benefits / privileges.

Take Forced Pooling / Forced Unitization rules for instance which IMHO codify a huge overreach by the State.

When I called the A G's offices to complain about it and request the A G to intervene I was told (paraphrasing here) that it was just not the A G's office's job to look out for the interest of individual private citizens; rather, their job is to be there in support of the various Departments / Divisions of State Government in enforcing the laws / codes / statutes / rules / regulations enacted by Legislation.  The administrator also told me that they could not respond to any individual citizen again saying it's just not the job of the A G's office to do so and the A G's office is disallowed to do so. I take it (I guess) that it must be the State of Ohio A G's office's interpretation that being there in support of the various State of Ohio Departments / Divisions as they execute and enforce the enacted legislation that they are looking out for the best interest of each and every and all Ohio citizens. 

The above is the best way I can put into written word what I was told.

So please don't make me laugh when you tell me to call the A G's office for help.

Seems to me the only way to correct an overreach is to re-write the legislation and then to enact / execute it and then to enforce the corrected version.

That's what I think needs to happen in the instance of Ohio's Force Pooling / Force Unitization Laws / Codes / Rules / Statutes / Regulations in the interest of protecting rights of private ownership of land.

All of this reply is written relaying my best understanding of what I was told in telephone conversation with an Administrator at the State of Ohio Attorney General's Offices and as always in my humble layman landowner's opinion (IMHO).

Permalink Reply by Joseph-Ohio on July 28, 2014 at 3:04am

It appears to me, just like any other, any will do whatever they want.

Judging by what I've read on these pages and elsewhere; and from what I've heard,  I'll liken any landowner trying to keep any opposite 'honest'; to attempting success at time travel or teleportation.

I haven't read or heard of anybody having any success at either of those things yet myself; anybody else read or hear otherwise yet ?

Permalink Reply by Joe Fabeetz on July 28, 2014 at 4:50am
There is most likely a "standard" clause in your lease called "right to assign". It may be too late to help you, but for future reference, before you sign, have your "knowledgeable attorney" ask the energy company to take it out or at least give you right of veto on the assignee. Before you sign a lease, ask the Landman what they intend to do with it flip it, drill it or sit on it. There are lots of ways to keep energy companies honest. If your attorney doesn't understand how, then you have the wrong attorney.
Permalink Reply by Greg Hamilton on July 28, 2014 at 5:20am
AEP, Aubrey company, will not add a market enhancement clause to a lease I am helping a landowner with. this means there will be all kinds of charges to ship the oil and gas taken out of the royalty payment of the landowners. this will not fly! Chesapeake approved several hundred leases with this clause when Aubrey was their president.
Permalink Reply by Joseph-Ohio on July 28, 2014 at 5:54am

Greg,

Curious to learn if the 'Market Enhancement Clause' that AEP won't add to the lease you refer to is one in the same as what I've read as being called a 'No Deductions' clause ?

Permalink Reply by Joe Fabeetz on July 28, 2014 at 7:44am
There are plenty of other companies. Talk to Range, Rex and many others. Not all have the same constraints, policies, objectives or approach. Tell them you will not accept a deal with no cap on post production expenses. Mention the Bass brothers. That will get their attention.

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