Helping Freehold Owners to Recover What Is Rightfully Theirs
Once a freehold lease agreement is entered into the interests of the freehold owner-lessor and the energy company-lessee correspond to the extent that both parties profit from production. However the oil and gas exploration and production business is exceedingly complex and situations may arise where the other business interests of an energy company-lessee come into conflict with its obligations to its freehold owner-lessor. Sometimes the energy company-lessee chooses the most profitable course of action and this may result in a breach of its obligations to its freehold owner-lessor.
- Your lease agreement may obligate your energy company-lessee to protect your mineral rights from drainage through offsetting wells
- Protecting your mineral rights from drainage may not be in the financial best interest of your energy company-lessee
- Some energy companies do not honour their obligations
- This creates an unsatisfied offset obligation
- Many hundreds of unsatisfied offset obligations exist in Western Canada
Natural Gas Spacing Issues
- in Alberta a producing well is designated as an ‘oil well’ if it initially produces more than 2 m3 of oil per day
- all oil wells produce some natural gas
- if the natural gas produced from an oil well was dissolved in the oil in the subsurface reservoir prior to human disturbance, the gas is known as solution or evolved gas and belongs to the owners of the oil spacing unit
- if however the natural gas produced from the oil well was initially in gaseous phase in the reservoir, the gas is known as associated gas or gas cap gas and belongs to the owners of the gas spacing unit
- many operators produce associated gas from oil wells without properly accounting to the owners of the gas spacing unit
How We Can Help
- Freehold Owners Recovery Services Ltd. ("FORS") can review your lease agreement in the context of your technical circumstances to determine if an unsatisfied offset obligation, a natural gas spacing unit issue or any other issue exists
- Once identified, FORS can attempt recovery of past unpaid entitlements for your account on a fee for service basis ($75/hr) or a contingency fee basis (33% of any recovery accrues to FORS with 67% accruing to you).
- FORS has a relationship agreement with the Freehold Owners Association whereby 10% of any FORS profits are returned to FHOA to further the objectives of the Association
Information We Need From You
- All we require from you is a copy of your lease agreement(s)
- FORS will be pleased to conduct a preliminary assessment of your mineral rights to determine if you have an unsatisfied offset obligations or a natural gas spacing unit issue for a fee of $75/hr, Assessments typically take 2-3 hours and are well worth having done to determine whether you may be entitled to recover what is rightfully yours.
If you are a member of FHOA and are interested in a preliminary assessment, please Contact Us. This service is not available to non-members of the Association.
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