FAQ
BACKGROUND QUESTIONS
1. Who Are We And What Do We Do?
We are your advocate in securing your mineral rights in certain neighborhoods in the Barnett Shale. We are a group of three law firms dedicated to obtaining fair compensation for Barnett Shale landowners whose cases we agree to work on. Our original emphasis when we formed in 2009 was on helping landowners associated with large networks or alliances of neighborhoods that negotiated lease agreements with the gas companies. We are no longer taking new cases involving alliances of neighborhoods reaching agreements with the gas companies, but we are interested in evaluating the facts of any gas lease dispute based on individual dealings with the gas companies.
The three firms that have united their forces are:
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PETROFF & ASSOCIATES 3838 Oak Lawn Avenue, Suite 1620 Dallas, Texas 75219 (214)-526-5300 www.petroffassociates.com |
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RIDDLE & WILLIAMS, P.C. 3710 Rawlins Street, Suite 1400 Dallas, Texas 75219 (214)-760-6766 www.riddleandwilliams.com |
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MATHIS & DONHEISER, P.C. 2001 Ross Avenue, Suite 2575 Dallas, Texas 75201 (214)-303-1919 www.mathisdonheiser.com |
LAWSUIT QUESTIONS
2. What is going on with the lawsuits that have been filed so far by your firms?
We strive to keep the "News and Updates" Section of our web site current. Click on NEWS AND UPDATES for more recent information concerning these cases.
On May 6, 2010, the Court presiding over these cases in Tarrant County, Texas ruled in favor of the gas companies and dismissed the Antitrust and conspiracy allegations that were contained in some of the early lawsuits filed on behalf of mineral estate owners in Arlington and Fort Worth. This ruling put an end to the Antitrust and conspiracy causes of action but the Court's ruling had no bearing on the underlying breach of contract, fraud, and misrepresentation claims.
Southeast Arlington Communities of Texas ("SEACTX") Update:
As members of SEACTX may recall, SEACTX entered into an agreement with XTO that required XTO to offer the pre-negotiated SEACTX lease form to all unleased mineral estate owners within the boundaries of SEACTX. We believe mineral estate owners within the geographic boundaries of SEACTX are intended beneficiaries of the agreement reached between XTO and SEACTX and as such were entitled to the opportunity to accept or reject the pre-negotiated lease. Since XTO did not afford all intended beneficiaries that opportunity, we believe XTO breached the contract with SEACTX.
After we filed lawsuits on behalf of several hundred mineral estate owners with property in SEACTX, the defendant XTO Energy filed a Motion for Summary Judgment in three SEACTX lawsuits on plaintiffs' claims of breach of contract, promissory estoppel, and negligent misrepresentation. In essence, a motion for summary judgment asks the court to make a determination (without a full trial) that (1) there are no issues of "material" fact requiring a trial and (2) in applying the law to the undisputed facts, one party is clearly entitled to judgment.
On September 29, 2010, the Court ruled in favor of the gas companies on XTO Energy's Motions For Summary Judgment involving the three of the earliest cases that we had filed against XTO, thereby dismissing those lawsuits. The Court's Orders are available in our Litigation Documents section. The three cases that the trial court dismissed all involved landowners suing XTO in connection with promises XTO made to the leaders of "SEACTX", the community of landowners in Southeast Arlington known as the Southeast Arlington Communities of Texas.
Since this ruling, we have filed an appeal with Fort Worth Court of Appeals on behalf of the plaintiffs involved in those three cases. A copy of our appellate brief that was filed on behalf of the plaintiffs is available on our Litigations Documents section. We are currently awaiting XTO's response to our brief. Please note that after all legal briefing has been complete the Court of Appeals will schedule an oral argument on the matter.
Southwest Fort Worth Alliance ("SFWA") Update:
After we filed lawsuits on behalf of several hundred mineral estate owners with property in SFWA, the defendants, Vantage Energy and The Caffey Group, filed Motions for Summary Judgment in the case of Joseph Maddox et. al v. Vantage Energy, LLC, et al. On February 17, 2011, a hearing was held on the motion where both sides made oral arguments before the Court presiding over the case in Tarrant County, Texas.
On March 8, 2011, the court entered an order severing one of the plaintiffs' cases from the Maddox case. These plaintiffs received a separate cause number and their case will be prosecuted separately. On April 12, 2011, the court entered an order dismissing two of the three cases in the original Maddox case. We are currently analyzing this ruling. The court's orders are available in our Litigation Documents section.
3. What Is This Lawsuit Against The Gas Companies All About? What Are You Suing For?
We are suing certain gas companies and land service organizations for breach of contract, fraud, and negligent misrepresentation. Almost all of our cases involve landowners who were associated with networks or alliances of landowners who made agreements with certain gas companies back in 2008. Copies of certain court documents provide additional details. See the Motions and Briefs we have recently filed in the Tarrant County gas lease litigation, which can be found in our Litigation Documents section.
4. Is This A Class Action?
No. We currently are suing on behalf of individuals and Homeowners' Alliances or Associations who we believe have valid cases based on the unique facts of their individual cases. We sometimes combine several landowner's cases into one lawsuit because they are similar, but we currently believe that filing the gas lease lawsuits in this manner is better than filing them as a class action.
5. How many lawsuits has your group filed so far on behalf of Tarrant County landowners? Where were they filed, and are there more to come?
As of March 2011, we have lawsuits filed on behalf of over 2,000 Tarrant County landowners. Our lawsuits typically contain several landowners in one lawsuit, and that is why there is sometimes confusion about the difference between the number of lawsuits filed and the number of landowners included. All of the lawsuits we have filed are pending in Tarrant County Courts.
6. What Happens After I Sign Up?
This first thing you need to understand about "signing up" with us is that we have decided not to accept any new gas lease cases involving networks or alliances of landowners that negotiated agreements with the gas companies back in 2008. We are interested in evaluating the facts of any potential gas lease case against the gas companies for individual dealings with landowners, but not cases involving alliance agreements back in 2008. This decision was made, in part, because we believe certain allegations against the gas companies for dealings with neighborhood groups back in 2008 may be barred by the Statute of Limitations after October 2010.
7. How much will it cost me to get involved in this lawsuit?
Nothing. We work strictly on a contingent fee. There are no costs or expenses unless there is a recovery or settlement in your favor. Our Attorney-Client Agreement specifically states the following: "If the claim is such that the fee allowed to an attorney is set by law, the Client hereby assigns to the Firms the maximum provided by that law, but there shall be no fee unless there is a recovery and the total amount of fees and expenses shall never exceed fifty percent of the total monetary recovery. It is further understood and agreed that the client will not owe the firms any money for expenses unless the firms successfully obtain a recovery for the client."
8. I understand the lawyers will not charge me if there isn't a recovery, but what about the gas companies? Could they countersue me and make me pay their lawyers' fees and expenses in defending this case if the gas companies win it?
It is theoretically possible that this could happen, but under current law, you would only be required to do this if there was a finding that your case against the gas companies is frivolous and groundless. As your lawyers, we would not file a lawsuit if we did not believe it was a good one, and we will stand behind any lawsuit we choose to file.
9. What do the gas companies have to say about these lawsuits?
The gas companies are very aggressively defending these lawsuits. They have filed numerous motions challenging these cases. Recent rulings involving these motions are discussed in the News And Updates section and some of the actual documents can be found in the Litigation Documents section.
In December 2009, XTO and Permian Land Company issued subpoenas and sent demands for production of documents to the homes of at least two of the people who volunteered to work with SEACTX and XTO in securing leases from individuals living in the SEACTX area. VANTAGE and the CAFFEY GROUP have served some of the leaders of the Southwest Fort Worth Alliance with similar subpoenas. These document demands and subpoenas can be found in the Litigation Documents section. More than thirty depositions of gas company representatives have been taken. On May 6, 2010, the trial court in Tarrant County, Texas ruled in favor of the gas companies and dismissed the Antitrust and conspiracy allegations. This put an end to the Antitrust and conspiracy causes of action but the Court's ruling had no bearing on the underlying breach of contract, fraud, and misrepresentation claims. On September 29, 2010, the trial court ruled against SEACTX homeowners on their other claims as well, thereby dismissing all of their claims with prejudice. Those Orders are available in our Litigation Documents section. These initial rulings only directly affected the claims in those specific lawsuits involving homeowners in SEACTX, and the impact of these initial rulings on other cases is unclear, but will be determined as later rulings are made. We have begun the process of appealing all of these adverse rulings. Our Brief on Appeal that was recently filed in the three SEACTX cases that are currently on appeal before the Fort Worth Court of Appeals can be found in the Litigation Documents section.
Our NEWS AND UPDATES page is updated regularly, and you should check there for more details about ongoing events in this litigation.
Defendants VANTAGE ENERGY and THE CAFFEY GROUP, LLC have filed Counterclaims against the three SFWA homeowners that are involved in the lawsuit entitled Joseph Maddox et al. v. Vantage Energy LLC et al. This amounts to an actual claim for damages that CAFFEY and VANTAGE have filed against the individual homeowners in those cases. CAFFEY and VANTAGE have not specified an exact amount of their alleged damages, but the lawyer for CAFFEY and VANTAGE has asked witnesses in depositions if they had "hundreds of thousands of dollars" to pay their attorneys' fees if ordered to do so. The timing of this first Counterclaim is notable as it was filed less than two weeks before the Plaintiffs in those cases gave their depositions. Counterclaims have not been filed against homeowners in any of our other cases and the Counterclaims essentially only address the claims originally filed by Plaintiffs under the Deceptive Trade Practices Act and for violations of Texas Antitrust statutes. The Counterclaim that CAFFEY and VANTAGE filed against these three homeowners can be found in the Litigation Documents section.
10. I understand the lawyers only get a fee on the signing bonus and the renewal bonus if there is one, but I am more concerned about getting a good lease so that I can have defined, written, legal rights in case the gas company doesn't do things the way I want them to in the future. Can you help me with that aspect of this situation?
We believe the work we are performing on the cases we agree to work on will eventually result in obtaining a better lease agreement than you could obtain from the gas companies on your own under current conditions. Our position is that there has to be a binding legal agreement as the foundation of a lawsuit that we will agree to work on. We believe binding written agreements exist in many situations in Tarrant County where alliances or networks of homeowners and homeowners' associations negotiated written agreements with the gas companies. These written agreements provide terms that we believe provide superior protection to the landowners who were left unsigned when the companies backed out of these agreements back in October of 2008. Our goal is to enforce those written agreements exactly as they were written, and we think this will provide far better protection than you are likely to be able to negotiate on your own today.
11. I understand the lawyers only get a fee if there is a recovery, but I am worried about the expenses they say I will be responsible for in addition to the one-third fee. What assurance do I have that the expenses won't eat up my two-thirds and I'll end up with nothing and the lawyers get everything?
Our Attorney-Client Engagement and Fee Agreement provides specifically that "there shall be no fee unless there is a recovery and the total amount of fees and expenses shall never exceed fifty percent of the total monetary recovery." While we believe it is unlikely that the fees and expenses will amount to fifty percent of the total recovery, we have agreed in writing to limit them to fifty percent. Keep in mind that we are also suing for attorneys' fees and your actual damages in addition to reimbursement for certain costs of the litigation. We are also suing for additional damages resulting from the gas companies' negligent conduct in the hope of deterring them and others from engaging in this type of conduct in the future. Some of your expenses will also be shared among other clients with similar cases. We think all these factors should make the out of pocket expenses on a given case relatively minor in comparison to the overall recovery, if any.
12. It looks to me like the total amount of attorneys' fees could end up amounting to much more than my signing bonus. Won't the lawyers be the only ones making money if that happens?
No, that cannot happen. That cannot happen because the fees we are awarded are added to the signing bonus and other recovery we obtain for you and then you receive two-thirds of the total recovery, minus expenses and costs incurred in pursuing your case. An example of how this would work in a specific factual situation is provided in our Fee Agreement.
13. Your Attorney-Client Engagement and Fee Agreement provides that the lawyers can withdraw from the case under certain circumstances. Can the lawyers withdraw and then make me pay their expenses and other costs that they incurred before withdrawing?
No. If the unique circumstances were to arise where we would have to withdraw from your case for the specific reasons stated on page 4 of the Attorney-Client Engagement and Fee Agreement, we will not charge a fee or seek reimbursement of expenses or other costs that we incurred in your case before withdrawing.
14. Why does your Attorney-Client Engagement and Fee Agreement ask for my social security and driver's license numbers?
According to Texas law, a party in a civil action must include in its initial pleading the last three numbers of the party's driver's license number and the last three numbers of the party's social security number. Tex. Civ. Prac. & Rem. Code 30.014.
QUALIFICATION QUESTIONS
15. What Neighborhoods Are Affected?
We are interested in evaluating the facts of any potential case against the gas companies, but we are no longer accepting cases involving alliances of homeowners suing the gas companies for breaching agreements the gas companies made with the neighborhood alliances in 2008. We currently represent thousands of landowners in the geographical areas involving five coalitions of homeowners' associations known as "SEACTX" (South East Arlington Communities of Texas) in Arlington, Texas, "SFWA" (Southwest Fort Worth Alliance) in Fort Worth, Texas, "BC-MRC" (Bedford Colleyville Mineral Rights Coalition) in Bedford, Texas, "BAMCO" (Bransford Area Minerals Cooperative) in Colleyville, Texas, and landowners who reside in the Deer Creek Estates community in Crowley, Texas, as well as certain cases outside these areas in Tarrant and Johnson Counties.
Also, please see our NEIGHBORHOODS PAGE for links to HOA & Community sites of interest.
16. Where Must I Own Land To Be Involved In This Litigation?
We are no longer accepting new cases involving landowners suing the gas companies for breaching agreements with alliances or networks of homeowners back in 2008, but we are willing to evaluate the facts of any landowner's potential gas lease dispute involving individual dealings with the gas companies.
17. If I signed a mineral lease and received my entire signing bonus payment, can the lawyers help me evaluate whether I am in a drilling unit or why I have not received any royalty payments?
No. We receive many questions from homeowners who signed a mineral rights lease and received a signing bonus (the initial payment), but have not received a royalty payment or heard from the gas company. Unfortunately, we cannot assist each interested homeowner in determining whether their property is in a drilling unit or whether they should be receiving a royalty payment.
PLEASE NOTE THAT THE FOLLOWING INFORMATION IS NOT INTENDED AS LEGAL ADVICE AND ONLY PROVIDES GENERAL GUIDANCE TO ROYALTY OWNERS WHO THINK THAT THEY ARE OWED ROYALTIES BUT ARE NOT RECEIVING PAYMENT.
There are several tools available on the internet that will enable you to determine whether your property is in a drilling unit or pool.
To review information regarding drilling locations, drilling permits and production, please visit the Railroad Commission's web site at http://www.rrc.state.tx.us. In order to view online research tools click on the "Data & Statistics" tab, which is located on the left side of the homepage. Next, click on "Online Research (Queries)."
To locate drill-sites near your property, click on the "Public GIS Map Viewer for Oil, Gas, and Pipeline Data" link. In order to view your property, select the county where your property is located and use the "Zoom In" Option. It is important to note that the symbol for a drill-site location is a
and the symbol for the bottom hole location is a
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If you find a drill-site near your property, you can obtain more information on that particular well by clicking on the "Map Tools" Option and selecting the "Identify Wells" Tool. Place the cursor (pointing hand) on the bottom hole location of that particular well. After clicking on the well, a popup will appear providing its GIS wellbore attributes. Additional well information, if available, may be viewed by clicking on the Operator/Wellbore/PDQ, Well Logs, or Drilling Permits links located at the bottom of the popup. However, these links will not be available if the API number has not been identified in the GIS.
To determine whether your property is located in the drilling unit for that well you need to click on the "Drilling Permits" link, if available, on the GIS Wellbore Attributes popup. The link will direct you to a "Search for W-1s" page, which will show one or more listings for that particular well. In general, the result will state: (1) Status Date; (2) Operator's Name/Number, (3) Status Number; (4) Lease Name; (5) Well Number; and (6) Current Status. Click on the most recent Status Date (the link is the Lease's Name). Located at the end of the "Review Page" are attachments, which include a PLAT, depicting the Unit boundaries where the well is located, and a P-12 (Certificate of Pooling Authority). These documents are downloadable and can enable you to determine whether your property is included in that particular Pool.
PLEASE REMEMBER THAT WE WILL NOT BE ABLE TO ANSWER GENERAL QUESTIONS REGARDING ROYALTY PAYMENTS OR WHETHER A PARTICULAR WELL HAS BEEN DRILLED AND/OR IS PRODUCING.
18. If I signed a mineral lease and received my entire signing bonus payment, can the lawyers help me evaluate whether I have a cause of action against the gas companies for their failure to make royalty payments?
No. If your property is included in a Drilling Unit where there is a producing well, you should consider contacting the Operator of the well (the Operator's Name is listed on the Form W-1 Review Page). You can locate the contact information for several Oil and Gas Operators at www.mineralweb.com. When you call the Operator take down notes and write down the names of individuals with whom you speak with during the telephone call. You should consider asking whether the Operator has delegated royalty payments to the purchaser of production or whether there are title curative requirements that must be met before you can receive payment. In addition, under Texas law the party responsible for payment of royalties ("Payor") is entitled to receive a signed Division Order from a royalty owner before issuing any royalty payment. This requirement can be found in Section 91.402 of the Texas Natural Resources Code (the "Royalty Payment Statute"), which is located online at www.statutes.legis.state.tx.us/Docs/NR/htm/NR.91.htm. Furthermore, you should consider asking the Operator the amount that has accrued for your account because a Payor is not required to make royalty payments until the amount owed is at least $100.00 under the Royalty Payment Statute.
IF YOU HAVE DETERMINED THAT (A) OIL OR GAS IS BEING PRODUCED ON LAND YOU OWN A MINERAL INTEREST WITHIN, (B) YOU HAVE SIGNED AND RETURNED A DIVISION ORDER SHOWING YOUR INTEREST, AND (C) THERE ARE NO TITLE PROBLEMS PREVENTING PAYMENT, THEN YOU POTENTIALLY HAVE A CLAIM AGAINST THE PAYOR FOR FAILURE TO PAY YOUR ROYALTY. IF YOU BELIEVE THAT YOU HAVE A POTENTIAL CLAIM AGAINST THE GAS COMPANIES, KEEP IN MIND THAT A STATUTE OF LIMITATIONS MAY APPLY IN YOUR CASE AND YOU SHOULD ACT PROMPTLY IF YOU DECIDE TO SEEK REPRESENTATION.
PLEASE REMEMBER THAT WE WILL NOT BE ABLE TO ANSWER GENERAL QUESTIONS REGARDING ROYALTY PAYMENTS OR WHETHER A PARTICULAR WELL HAS BEEN DRILLED AND/OR IS PRODUCING.
19. Will the lawyers be able to help me locate a copy of any gas lease that I may have entered into with the gas companies?
No. If you do not have a copy of your existing lease or royalty agreement, you can locate it at the courthouse of the county where the land is located. Moreover, you may be able to locate this information online at your county's web site. For instance, Tarrant County provides access to all property deeds, liens and leases filed after 1970. For this information go to the Clerk's web site, which is http://tcweb.tarrantcounty.com/eCountyClerk, and click on the "Online Searches" link located on the left-side tool bar. Then click the "Real Property Search" link (Note: Be sure to enter your name in the Grantor field when looking for a Oil & Gas Lease or Lease Memorandum).
BARNETT SHALE QUESTIONS
20. What Is The Barnett Shale?
The Barnett Shale is a hydrocarbon-producing geological formation of great economic significance to Texas. It consists of sedimentary rocks and the productive part of the formation is estimated to stretch from the city of Dallas west and south, covering 5,000 square miles and at least 18 counties. (source)
The field name for the productive portion of the Barnett Shale formation has been designated as the Newark, East Field by the Texas Railroad Commission.
The Barnett Shale is a large natural gas reserve encompassing more than 5,000 square miles and including portions of at least 18 counties in North Texas. In recent years, advances in drilling technology have made it possible for energy companies to extract large amounts of natural gas from the Barnett Shale. (source)
The Barnett Shale rock deposit is a rock formation deep below the Texas surface. It was discovered in the 1950's by wildcatters. In 1980, technological advances enabled companies to extract natural gas from the Barnett Shale. (source)
Over the years the Barnett Shale Natural Gas Field received fame when new drilling technology came into existence. This technology, which uses various fracturing techniques, is used during horizontal drilling. The Barnett Shale was the first major operation to extract gas from shale. Many companies are using this technology in other shale plays in the United States. (source)
The Barnett Shale is named after John W. Barnett, an early day settler who homesteaded in San Saba County Texas, where he named a local creek the Barnett Creek. During the early 20th century during a geological mapping expedition a geologist noticed the black shale outcropping in Barnett Creek and named it the Barnett Shale after the creek. In that area of the state the formation outcrops or touches the surface. (source)
What creates gas and condensate in the Barnett Shale is organic matter called kerogen that lies embedded in the shale. Through biogenic and thermogenic action, natural gas is given off. The Barnett Shale is rich in organic matter and some believe that biogenic action is still producing natural gas even now. The Barnett Shale is known as a "tight" gas reservoir meaning that the gas is not easily extracted. The formation is a very hard shale and it was virtually impossible to produce gas in commercial quantities from this formation until recent improvements were made in fracturing technology and directional drilling. (source)
21. What Is The History of The Barnett Shale?
Mitchell Energy drilled the first gas well in the Barnett Shale in 1981. After studying the Barnett Shale, the company could see its potential but knew drilling would be difficult because the natural gas was literally hiding in the source rock layers, which would have to be broken up to release the gas. After 20 years of research, the introduction of horizontal drilling earlier this decade made it possible to access the gas reserves contained within the Barnett Shale. (source)
The Barnett Shale has acted as an important source and sealing cap rock for conventional oil and gas reservoirs in the area. It was thought that only a few of the thicker sections close to Fort Worth would support economic drilling. It was not until the 1980's with new advances in horizontal drilling and well fracturing technology that the potential of the Barnett Shale was realized. Significant drilling activity did not begin until gas prices increased in the late 1990's. (source)
22. How Old Is The Barnett Shale and How Large Is It?
It consists of Mississippian age (354-323 million years ago) sedimentary shale rocks and stretches from Dallas to west of Fort Worth and southward, covering at least 5,000 square miles in the Fort Worth Basin. The Barnett Shale is also found as far West as Pecos County in West Texas. (source)
23. What is Seismic Testing?
You should be aware that if you own the surface of your property, in most circumstances, you have the right to prevent others, including seismic surveyors, from entering upon your property without your permission. Seismic surveyors know this, and they should seek your permission if they need to enter upon your property to conduct a survey. Typically you will be asked to sign a short document granting them permission to enter upon your property to conduct their business in exchange for some very small amount of money.
Some local city governments have also been given the opportunity to execute permits and in a few situations they have done so, permitting seismic testing on neighborhood streets which are public property. If the seismic surveyors claim this is how they have the right to conduct the survey, you should feel free to contact the city to verify this. Even if the city has executed a permit, the permit should not grant them permission to enter upon your property, and all of their activity should be confined to the public streets. Understandably, this is troubling to the homeowners that have chosen not to execute permits to allow testing on their property. Many of these homeowners have decided to use this opportunity to contact their local city representatives in order to express their concern.
While there are many different methods used to conduct a seismic survey, the typical method used in residential neighborhoods is to use large trucks with vibration plates or pistons, geophones which measure ground movement created by the truck's vibration plate or piston, and data collection boxes. Unless you have given permission to conduct these activities on your property, none of this equipment should be located on your property. The link below describes the process that is used by these trucks and the science behind the collection of the data.
As this is a matter that does not directly relate to your case against the gas company, the decision to allow a testing company to conduct these tests on your property is entirely up to you. There are pros and cons involved in both decisions and we advise you to weigh them carefully before making a determination. Please use the link provided below as a possible research tool. (source: Natural Gas Org)
