Exploration

Royalty owners sue oil and gas company for lease violations, fraud

Rig Count

Victoria AdvocatePeople in the Eagle Ford Shale region who’ve signed leases with Equinor for the mineral rights beneath their land are now suing the Norwegian-based oil and gas company for what they believe were violations of their lease agreements.

“Equinor disregarded both express and implied provisions of its lease agreements with royalty owners and entered into sham transactions with its own sales and marketing companies in order to manipulate the price paid on oil and gas production since 2013,” Bryan Blevins Jr., the Beaumont-based attorney for Provost Umphrey Law Firm who’s leading the case, said in a news release.

Some of the plaintiffs are from the Crossroads.

Blevins explained in a phone interview that multiple financial transactions between the company’s pipeline owner, treatment facilities and final sales team allowed the company to pay royalty owners at prices below true market value.

By doing so, the law firm believes the company engaged in practices that violate not only the express and implied terms of royalty owner leases but also the Texas Natural Resources Code. The lawsuits further allege that Equinor and its related entities committed fraud and conversion.

“Our clients have been systematically and intentionally underpaid by Equinor/Statoil for their mineral rights, and our goal is to make sure that the appropriate parties are held accountable,” Blevins said.

His firm is representing more than 200 royalty owners in the case, but Blevins said up to 4,000 royalty owners who entered lease agreements with Equinor, formerly known as Statoil, may have been affected by the same practices.

Equinor, then Statoil, entered the Texas oil and gas market in 2010, when it acquired 2,800 oil and gas leases covering 59,000 net acres and 494 producing wells in the Eagle Ford Shale under a joint venture with Repsol/Talisman.

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