July 9, 2018

The Squeaky Wheel Gets the Grease — Owed Oil And Gas Rentals? Get The Compensation You Are Owed!

The Alberta Government has paid nearly $10 million in compensation to landowners for rent owed to them by oil and gas companies, in as many years Do you own lands? Want to know how you recover money owed to you from oil and gas companies?

What are your rights to compensation?

If an operator owed you money under a surface lease, Right of Entry Order or a Compensation Order, you can bring an application to the Surface Rights Board. The Board may order the Alberta Government to pay you. It is in the Board’s discretion whether they award compensation.

What is the process?

The process includes these steps:

  1. Apply to the Board for rental payments. Your application will require information including:
    • A properly completed application form to file your application to the Board.
    • The right of entry document (e.g. a Surface Lease, a Compensation Order, a Right of Entry Order or a Consent of Occupant), and any amendments.
    • An up-to-date plan of the site, if available.
    • Letters or emails from the operator, about the rental payments.
    • A copy of the last cheque stub received.

  2. Complete a Statutory Declaration. After receiving this information, the Board will provide you with a draft Statutory Declaration, if your matter is straightforward. If your matters is complex, you may be required to write the declaration yourself. It must be properly completed and sworn.

  3. The Board will serve notice to the operator. If the Board is satisfied you have shown a debt owing, the Board will serve the oil company, demanding full payment to you. If the company does not respond within 30 days, the Board may send a second notice and suspend the right of the operator to enter the site. If 30 days more passes with no response, the Board may issue a final notice and terminate the operator’s right to enter your land.

  4. You may then receive the payment you are entitled to. If the operator’s rights have been terminated and you still have not received full payment, the Board may direct the Energy Minister to pay you from government funds.

  5. You may submit further applications. If you show that the oil company continues to default on the same site, the Board can order further payments from the government, to cover your loss. Less documentation is required, for such further compensation applications.

A word of caution about insolvent or bankrupt oil companies

Beware bankrupt or insolvent oil companies. The Board’s powers are very limited where rents were owing before an oil and gas firm went bankrupt. Bankruptcy restricts the Board’s powers to direct repayment of debts from before bankruptcy. If the rental payments become due to you after the date of bankruptcy, there may be some ability to recover them. Each case must be examined on its own facts.

Contact Us Today!

If you have any questions about getting your fair compensation from an oil and gas company, please call our Business and Corporate Law group, today. We will be happy to help you with your needs. If you want more information about our business law services, there are more articles here.