Sale/change of operator

Our small working interest was included in the sale by Ring Energy of its NM properties to Scorpion Oil & gas, effective 9/1/23. We have wells in Lea County. We’ve received no WI revenues since that time, & the wells are showing no production since July, (per NM records), even though we paid $4000+ in August to Ring, which included substantial work over costs.

Ring did not notify us of sale until late Dec & continued to bill us for costs, which we paid, since we were unaware of sale.

Neither Ring nor Scorpion responds. Have alerted NM, & they are investigating lack of production records.

Anyone else dealing with this? Recommendations?

Of course you could seek advice from an attorney who specializes in oil and gas law. And I understand it’s costly.

You could also review any contracts or agreements you have with Ring Energy and/or Scorpion Oil & Gas about the clauses related to notification of sale, revenue distribution, and responsibilities during the transition.

Last but not the lease: Document Document Document. Keep detailed records of all transactions, communications, and payments. This documentation may be crucial in any legal proceedings or negotiations.

Besides, continue to work with NW regulartory authories and be prepared for any legal battles.

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I just received DO’s on one of their wells in which I own an interest. I did not know the well had been sold either until receiving the DO. Maybe you receive DOs/something soon.

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You were part of the Ring sale to Scorpion? Or in a similar situation?

Appreciate your response.

Apparently when the operator changes, there are no new contracts. These properties have been thru numerous operators, & sometimes there is a Division Order.

We definitely have all documents & payments, which will certainly aid in the legal process, & hopefully it doesn’t come to that.

Ring is a public company & this may be a systemic deficiency in their accounting processes, & as such, their auditors may need to become involved.

Scorpion, the buyer, is a newish company…very little info on them

We are running into a similar issue. One of our royalty interests in Lea County was picked up by Scorpion from the Ring sale. No production showing since July as well. I just happened to notice the change in operators on MineraliQ a couple of months ago.

We emailed them directly and they never responded. In mid-December, Ring copied us to an email sent to Scorpion with our owner info attached because we wanted to see if the correct address had been transferred and they never replied.

My USPS informed delivery is showing that we have a DO that should arrive today from a new transporter/purchaser. We are currently expecting DOs for a handful of other unrelated wells, so I’m not sure if it’s for the wells Scorpion acquired from Ring since the transporters have also not been updated on NM records since July. I will let you know when we get it.

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Received another batch of Scorpion DOs today.

It is inexcusable that it has taken this long. Ring is at fault, as well as Scorpion. We haven’t seen any DOs from Scorpion yet.

And thanks for posting this! Will be interested in what you receive.

My siblings and I received our division orders last Friday. From Dorado, a Corpus Christi company hired by Scorpion to do production.

We signed and immediately mailed back (after checking that the owner percentages were correct, which they were).

We have some additional wells (at a different location, I think) that Scorpion bought from Ring for which we have not received DOs.

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Our USPS Informed Delivery shows mail from Dorado, which is probably DOs as well.

This sale from Ring was known since 6/23 per Ring 10Q, so it appears to be negligence on Ring’s part to not inform us all of the sale in a timely manner.

I agree. We just got the DO and it is for the interest in Lea now under Scorpion. The purchaser’s name is Dorado Oil Company, so maybe you can reach out to them to see what they know or if they have a DO on the way for you. The date is 1/16/2023, but the effective date is 12/1/2023, so I’m guessing they are just extremely delayed in getting them out. I’m still very curious to find out what happened to production between July and December.

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Just hold your horses. I am seeing a lot of “if y” properties being sold off to smaller operators. That means smaller staffs. You dont need to contact an atty yet. If your production is low, they dont have to send you a royalty until the end of the year. The recycling of Operators is always a pain for the Fedral and State Regulators, they have dozens every week to deal with. Non reporting is not a priority issue to the Agency (not that they ignore the issue) there are bigger fish to fry. The big Agency is reprting to the Tax guys, this part irons everything out eventually.

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Same situation here, fromwhat i can tell it looks like Dorado is producing the gas and not the oil. Interest ownership inparticular wells have dropped. If they show this on your stuff, then get your original deed and lease, the oil and gas maybe different agreement.

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We do have mail from Dorado coming per USPS Informed Delivery.

We are all owed for production from July to current. Ring is at fault for not informing owners of sale (so that we could intervene with Scorpion before now) & Scorpion as operator is liable as well.

As a Working Interest owner, Ring continued to invoice us for charges incurred AFTER the sale. Not knowing about the sale, we paid them. Their accounting is sloppy, at best.

There was negligence here & it will be interesting how it all sorts out.

In case anyone else has not received satisfactory response from Ring, there is a “Whistleblower” hotline on Ring’s website: click on “Contact”, scroll all the way to bottom, & follow the instructions.

I would expect that the Whistleblower hotline gets attention from management, or their legal dept, or their auditing firm (Grant Thornton).

I’m guessing also that Ring & maybe Scorpion stealthily monitor comments here & elsewhere.

I was informed by someone from Ring management that they (Ring) was not obligated to inform of the sale to Scorpion…normally it is the buyer (Scorpion), although it doesn’t sound like that is necessarily a legal obligation.

The person I spoke to was very nice.

Just curious, has anyone of you with former RING royalty interests been contacted by Scorpion? Are those of you with WI “enjoying” communication from the company? Any opinion regarding their timeliness? Thank You!

As WI owner, we had a “rough” start in communicating with Scorpion (to say the least). I am giving them the benefit of being somewhat overwhelmed by these new operations, & having to deal with tiny WI owners, like us.

However, we were just informed by Dorado that as of December, they are no longer buying oil from Scorpion, so not sure where that leaves things. I did send Nat Ragette (Scorpion) a note asking him for an update.

NM OCD Permitting still shows no production for our wells since July 23, although they were included in December check from Dorado.

It is a weird situation, for sure….

Still no reporting on production for ours either (Priest). We sent our DO back to Dorado at the end of February and got a confirmation that it was received, but have never received a check from them for our RI. Some places have taken up to 60 days to begin sending checks, so hopefully that’s all it is for us since we were delayed in sending the DO back.

I will try to get in touch with Scorpion as well to see what I can find out.

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