We have received checks from Statoil on mineral royalties since 2011. The ownership decimal was the same as the royalties we received from Chesapeake. December 2014-no check from Statoil. We called "Customer Relations", left messages, but the calls were never returned. We began emailing. After several days we received an vague email saying they had overpaid us. They had made a mistake for the last four years, so they said. And now that they have discovered the mistake we would not be paid until the amount of overpayment was satisfied.
So we kept asking what was the mistake and how did they arrive at the amount they had overpaid us.
They changed our ownership decimal.....sent us the new formula they were using. We could follow the numbers on the formula, and understood how they were figured UNTIL the last part. Everything was the same In the formula until the last part....the original decimal of ownership should be reduced by the bearer group 1 at 32.5%.
We asked where the 32.5% number came from, and that's when we were told they had spent more than enough time answering our questions.
I did some research on my own and found that Statoil made a deal with Chesapeake Appalachia announced on Nov. 11, 2014....for 32.5% of Chesapeake's assets.
It sure looks like Statoil used that magic number to retroactively reduce our royalty decimal of ownership.
IS THIS LEGAL ???
That doesn't sound right. It certainly doesn't sound legal. Based off what you said, Statoil should be paying you more than they used to.
Unless Chesapeak was paying you for the same interest that Statoil was paying you for. Then they would have overpaid you. But I don't think they could argue that they can get that money back from you unless there's a clause in your lease that says they can. Take a good hard look at your lease and see what it says. If you don't understand it, have your attorney take a look at it. If you don't already have an attorney, give me a call.
Mr. Hunter, did this get resolved? I would not like this either. Good advice form Kyle N. above.
Actually the percentage is listed in your original lease agreement. Statoil agreements allow them to use that percentage and adjust either higher or lower from the original with Chesapeake. On your first page of the lease agreement it shows this in the clause.Statoil right now is trying to get Mineral Right at the lowest percentage. This is due to the fact that are are using directional drilling to pool from the surrounding acreage where they pay no royalties on. In the contract with with Statoil they are telling everyone that will pool oil & gas and water from the ground without paying royalties also to run there equipment. There contracts have a legal loop hole which allows them to go in drill then cap during first part of the lease agreement time line and come back after the lime line is over and drill oil & gas without a payout to royalties.
Ancel Smith, no this has not been resolved. I think this whole thing demonstrates how the small, individual mineral rights holder is getting the shaft from all directions.
OIL COMPANIES & BANKS- Statoil had sent us a check in May of 2014 for $19,044. It had the print out of how that amount was determined. We deposited the check, and Statoil stopped payment on it without notifying us. The bank's fraud department called us wanting an explanation! We didn't know that Statoil had stopped payment or why! We were charged a fee, which the bank eventually refunded to us. We never did get a satisfactory answer as to what happened or why, and if that money was rightfully ours, we surly didn't get it.
OIL COMPANIES & STATE AND COUNTY GOVERNMENT- While we are now receiving no royalty income from Statoil, the valuation and tax rates have gone through the roof.
Last year County taxes had increased an average of 202% while income decreased an average of -50.01% ! It will be even more of a burden now that we are receiving nothing from Statoil.
We talked to a couple lawyers who told us that the amount of money in question....the amount that Statoil says they overpaid us $13,743.83, was not worth paying legal fees. We were also told that even if we had a great lawyer, Statoil would come in with ten lawyers and we wouldn't have a snowball's chance in hell of winning anything.
It is very discouraging.
By the way, after several emails to Statoil, they have agreed to email us a spread sheet each month so that we can see the amount of money that has been applied to our account, and what the deficit amount is.