By David Hedges, Publisher
www.thetimesrecord.net
For the thousands of natural gas owners in the Tawney class-action lawsuit, questions about their royalty payments have been settled.
But for other royalty owners, their problems may just be starting.
A $380 million settlement in the Tawney case approved last month in Roane Circuit Court will reimburse the 10,440 royalty owners a jury found were shortchanged by Columbia Natural Resources between 1990 and 2006.
But with a rush of leasing activity in progress, what the mineral owners won in the Tawney case may be disappearing for others.
Attorneys who filed the court case said mineral owners that were supposed to receive one-eighth of the proceeds from the sale of natural gas from their wells did not receive the full amount because expenses were deducted, often without their knowledge.
But in a number of leases written since the Tawney case was decided, some gas companies are including language that permits those same expenses to be deducted.
"The new leases they have allow them to do everything they got in trouble for, and more," Alvin Engelke, one of the royalty owners in the Tawney case and a small gas producer himself, said.
Robert Douglas, one of the attorneys who represented royalty owners in the case, said people should be careful about what they are signing.
He said there have been instances in which royalty owners have been mailed documents asking them to confirm they are an existing lessor. But the documents actually are new leases that allow for the deduction of expenses from royalty checks.
"They ask them to sign it to confirm that they are a lessor," he said. "But it's not the same lease. It's full of provisions to comply with the Tawney decision."
Douglas said gas company employees known as land men who often present leases to royalty owners are becoming more aggressive.
"They're doing anything to coerce people into signing these leases," he said. "Some of these people are ruthless.
"They will tell people they'll lease next door and drain all their gas," he said. "They act through intimidation and they have taken advantage of landowners for years."
In many instances Douglas said land men are even giving legal advice, even though they are not attorneys. He said the State Bar Association is looking into the matter.
Gary Zuckett of the West Virginia Surface Owners' Rights Organization said nothing should be taken for granted.
"People need to read the fine print," he said. "The devil is in the details and everything needs to be gone over with a fine-tooth comb."
Zuckett said there are more and more questions about leases at community meetings sponsored by the group around the state. The organization that formed a little over a year ago now has members in 51 counties. In addition to surface owners, he said nearly a third of the members are mineral owners.
In response to the increasing number of questions, he said the group has included information about leasing in their meetings, and on their Web site (wvsoro.org).
To be certain, Zuckett recommends mineral owners have an attorney familiar with oil and gas law go over any lease before it is signed.
"It might cost them a little up front, but it could save them a lot in the future," he said.
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