| If the rule of thumb is buyer beware, it must be royalty-holders beware after they received a ten-point complicated "letter" from producer Roy G. Hildreth and Son of Spencer.
Hildreth is asking regional royalty-holders for signatures on what appears to be a number of critical agreements.
It has a number of contractual statements regarding payment to the royalty owner, and indicates individuals signing the agreement might be giving up their rights to bring a lawsuit against Hildreth.
The letter comes after a $4 million plus decision by a Roane County jury against a large national corporation over skimming royalty payments, the company claiming everyone is doing it.
The damages have yet to be approved by the court.
Hildreth mailed letters to royalty holders on January 29, 2007, after the decision was rendered.
The letter is signed by Hildreth's "landman" Anthony Hofstad. It contains complicated legal terms and statements.
Many of the ten paragraphs contain statements regarding how the holder will be paid by Hildreth, raising red flags for those who do not understand technical legal terms.
The letter from Hildreth employee Hofstad calls the agreement an "Oil and Gas Ratification/Division Order."
The letter says Hildreth is asking "all royalty owners to sign these forms for our records..." They included a self-addressed stamped envelope.
Hildreth, a company that has significant royalty holdings themselves, announced they did not support the class-action suit which claimed holders were being taken by the gas corporations.
Their web site says "At Roy G. Hildreth & Son, Inc. we purchase royalty and lease oil and gas properties in Wirt, Calhoun, Roane, Clay, Gilmer, and Ritchie Counties (West Virginia)."
The site says "In all, we hold by production about 23,000 acres of leasehold estate on which we operate some 500 wells. Our financial statements are based on an average four-year production period. We have not attempted to fix a value on reserves, as there is a large amount of underdeveloped acreage."
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