The frustration level is high and people don’t know what to do about it.
That’s how a man hoping to organize mineral royalty owners in western North Dakota describes the situation for many people in the region.
Jim Olson reports on what’s going on.
(Janice Arnson, Williston) “They’re playing games with us and it’s not right for the simple person like we are.”
Janice Arnson’s mother signed a lease for the mineral rights on this land near Lake Sakakawea a few decades ago. But in recent years, Arnson says the oil company, Hess, has begun reducing the payments to her and siblings and cousins for what are called ‘other deductions.’
(Janice Arnson, Williston) “It makes no sense and we have no idea what those costs are that they’re taking out for because they’re not identified.”
(Bob Skarphol, Tioga) “There’s an awful lot of frustration on the part of people who have those old leases that they’ve signed.”
Bob Skarphol’s wife – she’s the toddler in arms in this old family photo – is having the same issue with the lease signed in 1949. In the past half-dozen years, mysterious ‘other deductions’ are reducing royalty payments by a third or more.
(Bob Skarphol, Tioga) “There’s numerous negatives going down the list that in the end, add up to around that 30% figure.”
Skarphol has discovered the deductions are for costs related to processing gas from crude oil – and he says oil and gas companies are cooking up ways to pile up the costs far beyond the price of the gas itself.
(Bob Skarphol, Tioga) “In some cases it’s the same entity making an agreement with itself to do these things and charge a fee for it, thus we get fees that are three times the value of the gas.”
Skarphol, a former state legislator from Tioga, says North Dakota’s laws in this regard lag well behind oil states like Texas and Oklahoma.
(Bob Skarphol, Tioga) “Some of these more mature oil states have learned the lesson that while we want the industry we also want the royalty owners to be treated fairly.”
(Janice Arnson, Williston) “We’d like this resolved. We’re just asking for our fair share. That’s all we’re asking is for Hess to treat us fairly.”
The meeting to talk about forming the Williston Basin Royalty Owners Association is Wednesday night at 7, at the Williston City Commission meeting room.
Jim Olson, KX News.
A Hess official responded to a request for comment on this issue and said the company pays revenue consistent with the terms of the individual oil and gas leases and consistent with North Dakota state law.
You can email Bob Skarphol for information on the royalty owners group at info@WBROA.com