A High River-area landowner is going through the paperwork to receive more than a year’s worth of payments from an oil company with a compressor and two wells on his property.
“The last payment was November of 2014,” said Jim Evans, who owns a section of land approximately 10 km south of High River.
Evans received $10,600 annually in compensation for the wells and compressor, which take up approximately 15 acres of land. However, he hasn’t received a dime from Lexin Resource Ltd. of Calgary in 20 months.
It was a common story as approximately 150 people packed the Cayley’s Oddfellows Hall on Aug. 10 to hear how they can get paid money owed to them — the vast majority of the landowners had wells or compressors from Lexin on their property.
MFC Industrial Ltd, purchased Compton Petroleum in 2012 for $33 million. Lexin, part of the MFC corporation, later took over the Compton wells.
Evans said he had no issues until he did not receive his expected payment in 2015.
“Compton was awesome and then MFC paid me for those first two years,” Evans said.
He said efforts to deal with Lexin Resources were fruitless.
“I called the guys in Calgary and they told me to email Hong Kong (where the parent company is located) and they told me to wait,” Evans said. “I’m now in the process of working with the Alberta Surface Rights… I’ve been trying to be nice because they (Compton, Lexin) have been good clients, they might be having hard times, but if I don’t pay my bills for a year people get a little pissy.”
The surface rights board is a quasi-judicial tribunal, funded by the province.
Pat Walker, principal with My Landman Group, which helps landowners with surface rights issues, including Alberta Surface Right applications, urged landowners to get applications in immediately.
“You are very lucky that landowners do have the surface rights board to have your back,” she said.
Walker said the surface rights board is effective and the landowners will get their money once it is approved.
Payment would be forthcoming from the Province after the board terminates the lease, and it usually takes about two months to get a cheque after the termination.
She said Lexin is not the only outfit delinquent on payments.
“We have clients all over Alberta with this problem,” Walker said.
“And I think there are going to be more companies, to be honest.”
Daryl Bennett, of My Landman Group, said it was important to get applications submitted in case Lexin declares bankruptcy in the future. If that happens, it would have protection from creditors, including the surface rights board.
Jill Mason, of Alberta Surface Rights Board, said there has been an increase in applications for unpaid annual rental.
“Normally we would have around 350 to 400 applications,” Mason said. “Last year we had about 735. That was a significant increase over previous years. The board last year directed to pay about $1.7 million.”
Typical payments per year in Alberta are about $750,000.
To date in 2016, there have been about 1,200 applications for recovery of unpaid rentals, and about $1.4 million has been directed for payment.
Richard Miller, who has land in the Mazeppa area, said his family received payment through MFC after much haggling.
“Mom and Dad’s were one of the first ones they (MFC) stopped payment on last October,” Miller said.
He said he got the paperwork done to submit to the surface rights board, but MFC made an offer, which the Millers rejected.
“When all was said or done they (the surface board) threatened them with closing the wells and that made MFC pay,” he said.
MFC paid for three of the five wells, with the surface board paying for two. He said he is not optimistic about receiving his next payment from the now Lexin.
Wade Nelson, who ranches west of High River, said he is glad those affected will get payment, he just wishes it would come from the oil company and not the provincial coffers. Nelson has wells on land that he rents.
Walker said while she understands the reluctance to take taxpayers’ money, landowners are forced to have wells and other resource-gathering equipment on their land by the government — they cannot refuse.
She added the Province is also receiving income for the gas on the landowners’ property.
Lexin did not have anyone speak at the meeting in Cayley. It has also not returned phone calls or emails to the Okotoks Western Wheel.
Livingstone-Macleod MLA Pat Stier attended the meeting.
