Hilcorp and San Juan Energy Co

I would appreciate any information on Hilcorp and their failure to pay actual royalties due since their 2017 purchase of Conoco Phillips holdings in the San Juan Basin. They are paying estimates based on last check from Conoco. Owner relations keeps telling me they are working on it. Has anyone else had this problem and resolved it?

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How can you tell the checks are not actual production? Check detail looks to be correct.

Owner Relations told me that we are getting estimated payments. It is the same amount each month which has never happened in 30 years. The detail of actual production doesn’t match what the check amount is.

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The amount of our checks is not changing very much, but they are not the same every month.

We are a non-op with RI in both Rio Arriba and San Juan Counties. Hilcorp acquired properties from ConocoPhillips in San Juan county over a year ago and have yet to receive a penny, not even estimated allocation. We are also receiving an estimated allocation on the Rio Arriba properties. When Hilcorp is sent emails, on this subject or other related questions, they are ignored by those on cc which are other managers.

Hilcorp also recently acquired properties from Enervest compounding the problem.

I need suggestions on how to pursue.

I wish I could be helpful. We have hit a brick wall when dealing with Hilcorp. They were supposed to start paying true amounts this month but we will receive another estimated payment—they have now been the operator for 19 months. According to information I have, there are 35,000 royalty owners in the San Juan Basin whose interests Hilcorp acquired from ConocoPhillips. I have been trying to learn if there have been any groups formed to deal with Hilcorp as maybe a large group would get attention.

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One more thing—New Mexico law requires that you be paid interest on any royalty payments withheld or not paid on time. According to what I was told by a person in Owner Relations at Hilcorp the royalty owner must write a letter stating that he/she expects to be paid interest.

Hilcorp acquired another company soon after the Conoco acquisition–I think maybe, XTO. Lots of acquisitions and little to no attention to owners. A letter explaining themselves would be a start.

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I, too, have mineral interests in the San Juan Basin under Hilcorp’s control. I have heard the same messages as above from Owner Relations. Owner Relations is a third party operation and the women with whom I have spoken are as tired of relaying inaccurate information as we mineral owners are of receiving it. They, too are bearing the brunt of this malfuntion or malfeasance. Now they (and we) are being told that April is the supposed date for “actuals.” I have been paid estimates for 15 of the 19 months that Hilcorp has been the producer. In March of 2018, after seven months of estimates, I received a check that finally looked familiar and I thought, “Great, an actual payment.” Then April, too, seemed real, May did as well, and then in June the payment I received was Zero, with no explantion from Hilcorp, only through Owner Relations when I called and asked, that there had been a mistake with the software system and the zero payment was a correction being made to rescind an overpayment. At the time Owner Relations told me that other owners also had this happen to them and they were angry. So, I have used my API numbers to look on the NM OCD site and have looked at reported MCF production from the time Hilcorp has been reporting. When I do the calculations it is clear they are under-reporting MCF’s which means they are skimming production off of my balance. Missing MCF’s means missing income. And their prices are no where near Henry Hub’s (the San Juan production is piped to Henry Hub). The estimates that were set for us in the beginning are guestimates at best. I, too, am curious if this is an across the board malfunction or only applied to a few of the 35,000 mineral owners involved. If this is an issue we share, it is time to consider organizing. There is no excuse left to explain the longevity of this situation. I am interested to hear from others who have experienced some or all of what I have experienced.

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I am looking for groups that may have already formed as well.

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Ive been looking for all of you! As an interest owner in the San Juan Basin I have sent letters requesting back payments since Hilcorp took over. My answer, like yours, is verbal and always says any day! I actually own an ORRI (overriding royalty interest) which is suppose to be payed before all others! Its time for legal action. I suggest we find out how to get a list of other interest owners and consider a class action suit. What do you think?

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We own a couple different interests in the San Juan Basin operated by Hilcorp and are still getting paid on estimates too due to well acquisitions from several different operators. We have looked into the issue and it’s very complicated due to the production payments being allocated by complex unit agreements (i.e. if you’re calculating a basic production royalty payout you need the unit agreement to see how well production is allocated inside the unit). Not to mention, in some cases there are multiple operators paying on wells located in the same tracts/sections due to farmout agreements by the historical operators
 Anyways, if someone hears an update and/or pending litigation about this goat rodeo please let us know. Thanks!

CL

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I also have the exact same problem
estimates from hilcorp going back to the acquisition
I was told last month they had a problem with their accounting software and it should be fixed may or june 2019
I am totally suspicious and feel like they are cheating me
I have called several times and have written letter too that are never answered
I too would love a law suit!!! Maureen

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I think there are attorneys in santa fe who have conducted 2 different class action suits 
Holland and Hart is one of them


whoops not with Hilcorp
.not re this situation. They had the Ideal suit and the shallow well suit and 1 other suing Conoco.

I have been corresponding with Hilcorp San Juan via email. I am being told that checks issued in April represent Actual interest revenue for February in addition to corrections from January. Makes no sense!! I asked for “true-up”, back revenue to be issued immediately with interest on monies they received and did not distribute to interest owners. No answer was given! Something about corrections going forward! Does anyone in this group have a rapport with attorneys in NM who have sued before?

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identical
last june ,nothing from hilcorp
last may finally a normal size check
 overage must be paid back in june??? As I looked over April 25 2019 check and info, I noted that half of wells are normal and not estimates
the other are still estimates
check numbers and you will see that “1000” means it is an estimate
al differing numbers means it is a real well number.

I have related experiences with all of the above. Because of Hilcorp’s “fiduciary performance” I’m not ready to trust them to meet all of the requirements as they move forward with what they term “actuals.” I have turned to a mineral management firm who plans to take a four year lookback, including into Conoco Philip last years of ownership to find and make corrective adjustments on my behalf. I have found statement misrepresentations of total well MCF withdrawals when compared to the NMOCD site figures and prices that cannot be easily confirmed but seem much lower than is reasonable when compared to Henry Hub. Additionally, there are two other reasons that I want to be cautious with Hilcorp. The Ideal Class Action suit guaranteed 18% interest on any monies owed and withheld when the name and location of the owner is known. Hilcorp states that one has to write and request the interest or they will not pay it. I have written twice and have a record of my request. Also, the Oklahoma shallow well ‘bifurcated’ suit resulted in New Mexico mineral owners in the San Juan Basin being eligible for the “New Mexico Payment Methodology” for 120 months or 10 years. This payment methodology means that transportation and production costs will be calculated at the “same-as-fed” rate. That rate can vary, however it is lower than the usual rate we are charged. I am interested in having oversight to make sure these two new laws are enforced. Having lived through the Ideal Class Action suit, I am reticent to jump on that wagon again. The misappropriation by Burlington/Conoco was around $550 MM and the settlement was $85 MM. Conoco ran the clock for 10 years, and 2,500 (+ or -) owners each received approximately 20% (+ or -) of what had been unlawfully taken from them. This is where I am on this topic at the moment.

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Payments are always two months behind production, e.g. February production paid in April. I think that the January production and income on the April statement represents accounting corrections— adding in what was actually produced and owed you based on January production but was delayed. March 25 payments were estimates.

Here ishw to tell if check data is an estimate:look at paid interest column on statement, if it says 1.00000000 it is an estimate.

Hi all,I also own minerals in San JuanCounty owned by Conoco previously and the news from hilcorp is very scarce ,the only e mail I got stated that transfer was completed and the account is in pay status .