Jade Owls recently offered my client $16,725.48 as total compensation for revenue on 4 prolific wells that have produced since 2014. Revenue due is $73,699.61 interest $57,045.28. Any royalty owner out there who has been working on curative to clear their title to facilitate payment of revenue on producing wells, be aware, Great Horned Owls - now Jade Owls will offer you less than $.15 on the dollar and threaten litigation if you refuse to take their offer. Their excuse is the Crescent Energy (managed by KKR - an entity know for leveraged buyouts and then bankruptcy) did not turn over the suspense funds at closing (it is the responsibility of GHO to perform a proper due diligence and insure royalty owners suspense funds are in tact). Given the number of Oklahoma royalty owners in suspense in the now GHO wells, the suspense account was massive according to attorneys who worked on the class action litigation against Contango/Crescent a couple years back. KKR, manages Crescent Energy, so it is not outside the real of possibility that GHO is just a front for KKR who will do the same to the Contango/Crescent assets.
Great Horned Owls has only been in business 4 years, right before Crescent Energy assigned approximately 800 producing Oklahoma wells to GHO, they were mortgaged to the hilt. In the same time frame of the assignment, all mortgages of GHO’s were released as well as the Crescent Energy (Contango) mortgages. There was no new mortgage by GHO, and they were reportedly strapped for cash (recent linkedin post). The question being, where did the acquisition funds come from? The only logical explanation is the suspense fund was raided by GHO, Crescent Energy, or both. Did Crescent give GHO a bargain deal and take off with the suspense cash. We’ll probably never know. In June, GHO assigned all the wells to another entity, Parliament Securities SPV,LLC and mortgaged the Oklahoma wells to UMB for $166 million.
The only way you can protect yourself and eventually get paid when this company goes belly up is to file a Oil and Gas Mineral Owners’ Lien for the revenue and interest due. The 2010 Mineral Ownes’ Lien Act makes royalty owners revenue a debt with a higher priority than mortgages, so, with a lien in place, you will be paid before the mortgages, so there will be a good chance you will get you money eventually when the owls go bankrupt.
I have filed a lien for $72,000.00 against the wells. I noticed a couple of materialmen’s liens for work on wells filed as well, so there is a trend emerging.