Landowners sue Encino Energy over royalty checks
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.
Chesapeake legacy
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.
Royalty dispute
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.
Encino responds
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.
Views: 5149
Replies to This Discussion
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Permalink Reply by Joe Bezel on -
The first of many such lawsuits. What Encino is doing is really unconscionable.
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Permalink Reply by Diane Flannery Dye on
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Yes! we have wells on our property and chesapeake was bad but now we make absolutely nothing!! Another way big business goes about squashing the landowners
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Permalink Reply by bo boboski on
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Chesapeake on steroids. May even BE Chesapeake under a new name?
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Permalink Reply by 28clr6acuhbmv on
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If God hadn't stepped in, sometime in the distant future lawyers and Encino would have settled out of court and the landowners would have lost because this is how it has always been when the Gold Ruled.
The Corruption Executive Order will have all of the Encino perps and those who enabled them (Wow an Encino Ohio, can't wait to see who set this up) locked up at Military Holding facilities like GITMO.
Who can resist a bag of cash during an out of court settlement? lawyer mcdonald couldn't, and those who have run Our Country were fine with lawyer mcdonald taking $20 Million in an out of court settlement, while his clients made up of 15,000 North Texans were given $25 Million to split among them for an average of less than $2,000 per Landowner. This was after being robbed from 2005 to 2016 of Billions.
I Strongly believe that WE THE PEOPLE are going to like living in a Corruption Free US.
Pray for Our President Trump, Our Military and the NSA who are working to make Our Nation Corruption Free.
With Our President Trump, it is Promises Made, Promises soon to be kept.
Enjoy the show at GITMO. I hear it will be BREATH TAKING for a multitudes of Traitors. No Deals, No one escapes justice.
That includes Past "officials" who thought they made off with a Bank Full Of O&G cash. The 12/21/17 Corruption Executive Order clearly states, Past and Present government officials. Some who hugged their Bible should have kept it open and learned that Crime/Sin doesn't pay.
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Ron,
Sorry, but you are delusional. Trump is the very definition of corruption, dishonesty and mental illness. He is also a traitor to our country, and hopefully will soon be impeached. Thinking Trump is going make our nation corruption free is a joke. You should really consider seeking psychological help, but after seeing some of your posts here, I suspect it is too late for you.
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Permalink Reply by william Allen. Ladd on
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In a sense Ron is trying to make some sort of determination of what is happening in the world today. And he goes by what the bible says. Now that is not a bad thing. But maybe he has to look deeper to understand the nature of the human specie.
Trump may have some great ideas BUT he is having a great deal of trouble gaining respect from just about everyone! He is quick to make decisions about important issues without really asking advice from others. I am not a fan of Trump, but how can you determine what is really on his mind by writing him off? Granted, Trump like to intimidate every one he has anything to do with. But being President of our country, he is in an entirely different ballgame then previously.
Everyone puts their own "SPIN" on a subject I guess.
Granddad Ladd
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I deal in facts DT:
Executive Order Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption
Whitehouse.gov link: https://www.whitehouse.gov/Executive Order "Severe Human Rights and Corruption", signed by Our President Donald J. Trump on 12/21/17: https://www.whitehouse.gov/presidential-actions/executive-order-blo...
Copied from Executive Order:Executive Order Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption
Issued on: December 21, 2017I hereby determine and order:
Section 1. (a) All property and interests in property that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person of the following persons are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in:
(B) to be a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in:
(1) corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery; or
(2) the transfer or the facilitation of the transfer of the proceeds of corruption;How do You dispose of Corrupt individuals in a World too Corrupt to Convict the above once they are Indicted?
Use the Military Tribunal Executive Order updated Jan 2018. No deals, No one walks.
NOTE: THIS EXECUTIVE ORDER IS VERY HARD TO FIND, BUT I HAVE A LINK THAT I WILL PROVIDE LATER after I find it, Again!President Trump made a Campaign Promise that the Corruption Would Stop. Everyone from the Top of the Government to the individual will obey the laws of the US or they will find themselves in Prison.
The World Has Changed. Most of the Corrupt didn't get the memo.
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Permalink Reply by adam sorell on
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definitely too llate. blumpf to end corruption lol.. wtf wrong with these people?
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Speaking of things that are sad, similar to going from bad to worse in the Royalty Payout department by having Encino/China stealing it all, O&G People and Landowners typically have pets so it is fair to make the following post.
If You are experiencing a Cat die off at this time, it may be the dry indoor cat formula produced by the company that sports a checkerboard next to their name.
Call the number on the bag and they will tell you how sorry they are and send you a refund for the bags of cat food that they changed the formula for recently, the Vet bills are Your problem.My bet is that they will send a check that if I were foolish enough to sign, would relieve them of all responsibility for whatever error they have made. I won't be cashing any checks from these folks, but I will take all of the food I have left back to where I purchased it and show them my "Checkerboard" Case Number and a phone number they can call to ask about why customers are returning their product.
The last time this happened it was blamed on China putting Melamine/plastic like the plates from days gone by, in the formula used to make the dry Cat food. I lost cats back then and gained a greater distrust for those who would kill animals to make an extra buck.
I believe we are currently kicking China's butt as I type this post, right here in the US. That story won't be seen in the Fake Corporate owned News. The Chinese are learning not to show up in Our Country without proper documentation and an invite, and never again show up in UN uniforms.
One day this will be old news, and I will post accounts by these folks of exactly how if feels to be "De-Bunkered".
Pray for Our President, Our Military, the NSA and Patriots who are in the fight.
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Permalink Reply by william Allen. Ladd on
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Thank you for the "HEADS UP" about the catfood posting Ron!
Some countries will do anything to make a buck sad to say.
Granddad Ladd
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Man, this thread went off the rails pretty quickly! I guess I came here looking for answers concerning Encino and what they are doing to landowners, but there really doesn't seem to be any coherent discussions here. Oh well.
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