Monthly Archives: May 2019

The Litigation seeks damages for Defendant’s alleged underpayment of royalties to the royalty owners in the Class described above on Oklahoma wells where Defendant (or a predecessor or affiliate of Defendant) is or was the operator or, as a non-operator, Defendant (or a predecessor or affiliate of Defendant) separately marketed gas.
Plaintiff John Cecil (“Plaintiff”) alleges that BP America breached an implied covenant to market, breached the underlying leases, breached an alleged fiduciary duty, violated RICO, and committed fraud with respect to royalty payments for gas and its constituents (including helium, residue gas, natural gas liquids, nitrogen and condensate).

From information page on the Cecil Settlement with BP.

Clearly natural gas is the go to best energy source. It is much cleaner, easy to transport and should be used in more engines, especially as natural gas diesels where efficiencies are extra high. Further, it is a great fit for trucks, stationary generators, etc.  It burns clean and the oil gets very few contaminates. But the drawback is that the drillers don’t want, are producing too much of it as an associated gas to oil, and they are flaring it off to the detriment of the environment, the mineral owners, and the nation. Every MCF of natural gas flared is wasted and that is a disgrace.

We need prorationing to keep companies from this waste. And we are not going to get it. Too much politics as desperate companies, just like in the depression when oil went to 5¢ per barrel, will cheat, lie, and swindle to sell enough oil or gas to pay the bills even when selling at a loss. Drilling should be limited, especially in areas of glut such as the Permian Basin. Zombie companies propped up by Wall Street hedge funds are cheating mineral owners and doing no one any favor. It is time to return some sanity to the market and force these companies to state their reserves.

Air Drilling Philadelphia Creek, S of Rangley CO – 1978