No royalty payments - South Benbrook, Tarrant County Texas

General Mineral Rights Discussion
#1

My siblings and I share royalties from five wells in South Benbrook, Tarrant County, Texas, Barnett Shale area. The royalties come from Encana and were averaging $300 to $400 a month for each of us until April when production was ceased. We were told that Devon was fracturing nearby and causing problems and they didn't know when things would get back to normal. I understand from a spokesperson with Encana that a lot of royalty owners have been inquiring about the shutdown.

It is now almost the end of July and we haven't heard anything. While we accept the fact that these royalties are not guaranteed, we are a little confused at the situation. Does anyone have any idea what might be going on there or are going through the same confusion? Encana just tells us that it will take several months to get things going and that was back in April.

Would you assume production will be shut down permanently? It is just frustrating not to know or understand what these people are doing when you have an interest (while limited). Thanks for any advice.

B

#2

Brenda:

First of all, I never try to second guess the actions of operators as many hidden factors could possibly be involved. You might contact the Railroad Commission of Texas office in Kilgore, Texas which is the local field office for this area and attempt to learn more about these wells in question.

#3

Dear Brenda G,

Mr. Mallory is correct. Your information concerning Devon -- is that speculation from a farmer down the road, or is straight from a company man with Encana?

If Devon's operations are causing problems, there is not much you can do about it, if Devon did everything in compliance with RRC regulations. I would be more than a little surprised, if Devon killed 5 wells by their operations. Go here for a further explanation on fracing and trespass.

http://www.mineralrightsforum.com/profiles/blogs/is-fracing-tresspass

It is a small matter to contact Encana's office production department and find out what is going on. Also, you might certainly want to have someone look over your lease as to cessation of operations and cessation of production provisions. Encana may lose the lease if those provisions are triggered.

Also, if Encana is going to conduct legal actions against Devon, you might want to get an attorney and join as an interpleader in the suit.

#4

I wrote to Encana's production office in June. This is an exact quote from an Encana representative in his reply letter to me dated June 27:

"The Benbrook Lake South wells were affected by an offset frac from another operator. We are currently awaiting completion of their operations before we attempt to restore production to these wells. We are certainly hopeful that these wells will return to a rate of production that will allow us to operate them on a positive cash flow basis. That is our intent. We do not know at this point in time when production will resume"

I was also told by an Encana representative that Devon was the operator who was conducting the frac work.

It doesn't sound like Encana is going against Devon. I will study my lease but like most total dummy novices in these matters, I probably signed the lease without thinking about any problems like these. I don't know a durn thing about this kind of stuff so just kinda stumbled in and signed things, as did my brother and sister.

Thank you all for your assistance. I will contact the Railroad Commission and give this gentleman from Encana another call. If you have any other suggestions, I appreciate it so much,

B

#5