Hello all,
I am new here and excited to be part of a very large group.
A little background; My sister and I had inherited our father's mineral rights a couple of years ago. The Mineral Rights were split up 1/4 to each of us, and 1/2 to our step mother. She passed away last year and we are now receiving 1/2 each.
I maintain an Excel spreadsheet so I know exactly what we get and when. Our Pioneer and other mineral rights payments doubled which is what we expected once the Division Orders were processed. Linn also purchased our Kansas wells from Pioneer, I think in Nov. 2014.
But in February of this year (2015) (this was Pioneer's last check to us) Linn processed our Pioneer mineral rights and our Exxon/XTO/Linn mineral rights have been almost non existent. We were told the Division Orders had been processed for Exxon/XTO/Linn in February because they were so far behind with XTO's paperwork.
I went through Exxon/XTO/Linn and Pioneer's production and it was way down - I contacted Linn and they told me that all the prices were down and that they had a station in Kansas explode so their production was way down. This month we received a check and it was less than the amount has been since our inheritance doubled just for the Pioneer - which means the Exxon/XTO/Linn disbursement is pretty much non-existent.
So, my reason for this post is; I saw the (Ed Broome) post and am wondering if any other mineral rights holder has been having the same issues with Linn? My sister and I were going to wait until our July distribution before we contact an attorney.
Thanks for your input
We have had the same issues, before we were moved to Linn we were under Berry Petro and loved those guys. Linn came in and bought out Berry and closed the Denver offices and laid off quite a few of the people we used to be in touch with. We cannot seem to get a straight answer from anyone at Linn and are having issues understanding why for 3 months our wells were shut off and then turned back on. I was told the casings broke but was told by someone in owner relations that is not true so we do not know what to trust or expect from them.
Joshua,
My sister has this incredible gut instinct. She feels like they have been lying to us. One excuse after another. Our income for Pioneer was around $700.00 per month, our income from XTO was around $300.00 both after the Division orders went through. Then all of the sudden when Linn took over Pioneer and XTO in February of this year, our monthly total for both for this month is $500.00. Well below past distributions. All the while blaming it on the prices going down and lower volume.
This question is not meant to insult anyone, but have you made sure the division order calculations for your royalty interest are correct with Linn? Is the royalty interest appearing on your royalty check(s) the same as your division order?
Not insulted at all. Yes Sasha from Linn went back and checked out shares to make sure. We checked just about everything including the land man checking on current acreage etc. I don't believe in coincidences. The timing of this was too convenient.
Have you compared production volumes from Tx RR Commission to volumes reported on revenue detail attached to your check? Also could be deductions. Have Linn check to see if more than one owner number set
Up. This can create problems. Let me know. I get checks from Linn on Devon purchase, Ok properties. Sounds like Linn has made a few acquisitions. Transitions are not always smooth.
Hi Stephanie,
Yes we did compare production. I can't remember if I compared those, I will have to go back and check. What is the difference between the two?
The funny thing is, when I did research on the internet, the articles had said that their production was up. When we look at my gas and the oil, production was down. Along with most of the price per unit. And in February when they took over - alot of charges.
I researched my parent's royalty payments - the last time they were anywhere this low was back in 2008 after the crash - Natural gas isn't crashing right now.....
Thank you for your insight - always need help. If you think of anything else, let me know. ;)
I would inquire with Linn Energy in writing about how they determined the deductions from your royalties. In the meantime, I would review my leases that Linn acquired and see what provisions they may have (if any) to deduct or charge for expenses in association with your minerals / gas extraction.
Linn could be deducting expenses that are agreed to in your lease. It is possible that former operators did not exercise their rights to deduct those expenses. It could also be a mistake (and not allowed by your lease) for Linn to deduct those expenses. Review your leases carefully!
Kitchen,
I have thought about that, unfortunately we don't have the original leases, we only have division orders from when we inherited it. I am assuming I would ask for a copy of the lease from Linn. We should do that anyway, just in case. Thanks for reminding me.
Christy,
I think it may be easier to get copies of the original leases from the county clerk or recorder's office in the county that your minerals exist - rather than waiting for the operator to provide you a copy (which they may or may not do).
You will need to know the name(s) of the original person(s) that signed the lease, possibly who they signed the lease with (lessee / oil & gas co), approximate year, or year range that it was filed. Also it helps to know the legal description(s) where the minerals are located.
Most small counties are pretty good with helping on a small search like that if you have enough general information. Being courteous goes a long ways!
Kitchen,
We inherited this from my father who inherited it from his mother who inherited it from her sister. Most of these leases are over 50 years old. I am thinking I might contact our attorney first. My father may have filed copies with him. Might cost us, but might be quicker.
Hi everyone,
We contacted our attorney who has been the president of SWKROA for many years - this was his reply to me today regarding Linns latest Royalty distributions.
"There have been a number of SWKROA members who have complained about the lower amount of royalty payments from Linn Energy. Enough so, that the Board has requested SWKROA general counsel to review the matter. We have sent them a number of examples of the concerns and they are in the process of sifting through the check stubs to see if Linn is not paying properly. We hope to have their report soon. In the meantime, probably the best advice is to have you make a written inquiry to Linn (by certified mail), to ask them what is going on. "
Just thought this might be helpful to anyone else who may be having this problem.....
Christy,
Who is your contact at SWKROA? I am in Omaha and asked for our numbers to audit and Linn is giving me issues that they do not give out that information and not sure what information they can send me.
Things are getting shadier by the day with them, our checks were 10-20k with Berry and now looking at the numbers from what I can see on the Utah Oil and Gas website it looks like we are being shorted 2-4k/month
Hi Joshua,
Erick Nordling. He was the past secretary or something like that for years, so he knows everyone there.
We are down at least 50% on Pioneer, which Linn purchased this year (as soon as they took over) and almost nothing from XTO which they purchased last November. They are telling us that a pumping station blew up and that the values are down bla bla bla.
Please contact Erick and see if you can provide any additional info.
Erick E. Nordling, Attorney at Law
Kramer, Nordling & Nordling, LLC
209 East Sixth Street, Hugoton, KS 67951
Phone: (620) 544-4333
Fax: (620) 544-2230
Email: erick.nordling@nordlinglaw.com
Thank you for your response...
I have a slightly different issue.
I had leases with Pioneer Natural Resources in SW Kansas that were acquired by Linn Operating. I just noticed that in the royalty payments sent to me since around March 2015, they have been deducting approximately 13% of my royalty interest for "Discount-PNR Acq". I would take that as meaning Pioneer Natural Resources Acquisition.
Has anyone else started working with the Linn Operating people to see why this "discount" is being applied?
I think I will give the same information to the SWKROA Southwest Kansas Royalty Owners Association to see what they know about these charges/discounts.
Lee,
I think the more information we provide to the board, the better. I am sure there are several issues that are not known until they are revealed by the mineral rights owners......
Christy,
Just got an email from the accounting department from LINN about why our rights have been down I would look into if they give you the same information. Their pricing they sell at is "Marketing contracts" they have with the buyers and is not necessarily the going rate. They also have oil kept behind that has not been sold but has been produced already. I have asked for the exact rates they are selling the oil for to compare to the standard rates.
Joshua,
I keep seeing several issues with Linn. It feels like they are going to do what they are going to do until mineral rights owner push the issues. The more info we provide to SWKROA the better. I figure there are several issues that will need to be brought to light that may be a bit sketchy at this point.
I'm not sure that the original lease says because I don't have a copy on hand. I would have to dig to find it. We inherited these from a long time ago from my father.
I got a nice response from Linn on this matter. I researched their answer by examing prior royalty payments from Pioneer Natural Resources and found it to be true regarding the 13% discount to gross. I am ok with Linn now.
"Royalty settlements are all based on the Alford et al vs. Pioneer Class Action Settlement:
The settlement provides that Pioneer provide the 100% PEPL price and 100% actual helium sales price in calculating gross revenue, and then a 13% discount value booked as a revenue deduction to arrive at the net settlement values. The 13% discount is to compensate the processor for any processing costs it incurs. (Class maintained that gathering and compression to get the gas to the plant is a lease operating expense).
The deduct is the same as Pioneer’s DC code highlighted below. Please let me know if you have further questions. Thank you."
Lee,
Thank you for your reply. Unfortunately, our Pioneer is down a lot more than 13%. And, Exxon now that Linn has taken over is almost non existent. This all happened as soon as Linn took over and started processing payments.
If it were only Pioneer - I might find their answers acceptable, but it isn't. We went from $1,200.00 per month to the mid $500's the moment Linn took over. And after talking with our attorney - we feel that Linn's practices are once again being called into question from a substantial amount of mineral rights owners.
I am glad that you were able to receive a satisfactory answer from Linn.