Landowner Risks
That leaves the ranchers and homeowners that allowed companies to extract minerals from their land at risk. Filing a lawsuit isn’t helpful because the company responsible is insolvent, Keller said. Turning to state officials for help is a waiting game, as the agencies responsible for oil and gas cleanups are shorthanded and usually have a long waiting list.
Finding a company representative to sort out problems with royalty payments also is more difficult during bankruptcies, when company workforces may have been reduced to skeleton crews.
Paul Midkiff, head of the Oil, Gas and Minerals Group at Wells Fargo Private Bank in Fort Worth, helps royalty owners manage their finances and relationship with drillers. He said he’s fielding calls from mineral rights owners across the U.S. trying to make sense of their monthly checks.
“They don’t know where to look,” Midkiff said by telephone. “You’re calling an 800 number and not getting the call backs or not getting the responses in a timely manner.”
Logistical Difficulties
Geography can also become a headache when royalty owners don’t have easy access to court proceedings in another state. Quicksilver Resources Inc., which filed for bankruptcy protection in March, said in court documents it owes $12.3 million to mineral rights owners and other interests.
Most of those resource owners are in Texas, but an April 27 hearing held to give creditors a chance to meet with the company was in a court in Wilmington, Delaware, where the company filed for bankruptcy. Calls and e-mails Wednesday to a media line for Fort Worth, Texas-based Quicksilver Resources and to the company’s attorney weren’t returned.
Clint Liles, 73, a frequent poster on “Mineral Rights Forum,” an online chatroom for private citizens coping with the complexities of oil and gas leases, often dispenses advice to royalty owners. Liles thinks he’ll be getting busier as more drillers face down bankruptcy.
“I’ve had several people call me or message me,” Liles said by telephone from his West Texas ranch. “These oil companies -- it’s hard to figure out what they’re going to do.”