If they are operating one well on your lands I would look at how much the well is producing for them and then I would get my attorney to get on the RRC and see how many wells they are operating in the District. It sounds like they could be very small operators with marginal wells that they are operating. I would have my attorney spend an hour or two briefing on all the remedies that are available to you after you file a suit for damages, i.e. injunction, receivership, garnishment, etc. I would also check on their creditworthiness in the community of Giddings and find out who they bank with and where they might have other assets. A shotgun approach might make them throw their hands up, who knows. All of this is predicated on a valid claim for damages for the condition of the road and although your lease probably does not have any termination provisions for this kind of damage, it does not (I feel sure) preclude you from suing them for actual damage to the surface.
Just some thoughts and definitely not any legal advise. As an aside, if Clinton Manges was around, I would suggest you call him. Just a bad joke, don't worry about it.
What do you think it means? My lawyer lives 2,000 miles away, charges me $50 to talk to him (he is worth it though) BUT IS SO BACKLOGGED that I would not hear a response for 4 months (if I am lucky). If I don't have a case or am misinterpreting things then I will drop it.
You would save me a lot of grief and your answer would be appreciated no matter what it is.
Thanks for your input no matter if it is positive or negative. Eric
Dear Eric,
Congratulations on reading your lease form. So many do not.
Now ask your attorney what he meant when he drafted that language. I think that I already know the anwer, but get it from him.
Incidentally, this same line of questions have been asked and answered many times on this board,
Sorry to hear that your lawyer is not giving you great service.
If I were a betting man, I would bet that some landowner somewhere has already made an attempt to be paid on a hedge price. I would also be willing to bet that some insane lawyer took the case. I would also bet that a summary judgement was quickly issued, holding that royalty is paid on oil and gas saved and (most likely) sold and not on independent financial transactions. IF the lending institution asked for a hedge and was also the purchaser of those particular molecules of hydrocarbons, then maybe a better argument could be made.
You do not have a case. The sale of oil and gas is the sale of a product. Your oil and gas lease provides for a royalty on the sale of that product.
The hedge is a financial instrument. The drafting of a "arms length transaction" clause has to do with setting a market price when a less than market price is received by a subsidiary. To ask for a royalty on a hedge would be like asking for a royalty on a T-Bill.
The market is in almost all cases set FOB at the wellhead -- not one mile away, not 10 miles away, not at Cushing, OK, nor on the floor of a commodity exchange. The real market is what you sell that oil for. Whether it is to Plains pipeline, or the ExxonMobile refinery in Beaumont, Texas.
Best,
Buddy Cotten
Eric SL said:
Buddy Cotten said:
To Buddy Cotten From Eric:
What do you think it means? My lawyer lives 2,000 miles away, charges me $50 to talk to him (he is worth it though) BUT IS SO BACKLOGGED that I would not hear a response for 4 months (if I am lucky). If I don't have a case or am misinterpreting things then I will drop it.
You would save me a lot of grief and your answer would be appreciated no matter what it is.
Thank you for the information, that makes sense. Eric.
I did not say my lawyer was not giving me bad advise.
I am in the Midwest and he is in Texas. He charges a reasonable fee, is much in demand and would
(and has) charged me $50 for a phone call. Which I did not mind because he is good, reasonable and writes
leases that are favorable as can be expected to the mineral right owner.
I did not try and contact him because without exaggerating it would have been 5 or 6 weeks before I got a response.
I wrote to someone earlier that with the thousands and thousands of lawsuits by all parties involved that information on subjects such as a court ruling on hedging would be on the internet for the public to read.
The hedging subject was taken to Louisiana's Highest Court and the oil company won. However, Texas is not Louisiana and states next to each other interpret things differently which I guess is why we have the Federal Supreme Court.
I can take the information that you wrote and show to my siblings so as to give them one less thing to worry about. Like I wrote yesterday, any information good or bad is much appreciated. Thanks again. Eric.
Just so we are clear, I said that I was sorry that your lawyer was not giving you good service. If he takes 5-6 weeks to respond, you are not getting good service.
A Louisiana case would not surprise me. Some of the most amazing cases that I have ever seen come from that state.
Warmest regards,
Buddy Cotten
Eric SL said:
Thank you for the information, that makes sense. Eric.
I did not say my lawyer was not giving me bad advise.
Yes, I misunderstood what you meant about the lawyer. I suppose there are trade offs
In life. Do you want fast and mediocre or slow (uber slow) and quite satisfied. Of course I have not
seen many oil leases to really know, but others who I have had look at it, seemed to think
I (we) got a good percentage, plus all the stuff that I would not of thought of, (Since I am not contract lawyer)
like ingress & egress (in and out, to normal people), cleanup and who is responsible for environmental damage, etc. Thanks again from the Midwest, Eric.
I think the main reason owners do not argue they should be paid the hedge price, is how do you prove what oil was sold under which hedge contract? The hedge contracts accumulate production from numerous leases and it may be impossible to track which production was sold under which hedge contract. Plus, I think most owners want certainty in being able to audit their production. You can prove where your oil was sold, to whom, and at what price if you are being paid on sales off the lease.
There have been some threads on this topic before. Try the search function in the top right hand corner.
I would strongly suggest you to hire a lawyer or consult with some professional leasing adviser. What do you think it will cost to fix the roads? Also, try your best to solve this issue outside the court take advice from lawyer and leasing consultant but do not take the other party to court as it will cost you a lot on long run. you will end up paying more than the deal it's self. Play safe.
Before you go to all of the expense to hire anyone, call your states oil and gas commission and tell them your story. They are there to help you and will call the company for you and/or let you know what your rights are. The Oil and Gas Commission of every state has a wealth of information.
Sounds simple, but sometimes that is all it takes, worth a try. When an oil company hears from them they do not ignore them as they report to them.