Landowner says she could have signed away royalties if she hadn't read fine print
Created: July 31, 2008 02:37 PM     Modified: July 31, 2008 06:21 PM

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There's a lot of money to be made from the Haynesville Shale -- and a lot of people have come to the area trying to grab up land, mineral rights and royalties.

But the methods of some are being scrutinized.

Candes Kelley of Bethany hopes natural gas is found under the five acres of her land she's leased to an energy company and she can collect royalties.

Kelley hasn't seen any drilling in her area, so when a $500 "royalty" payment came in the mail from a different company than the one she signed with, it caught her by surprise.

Then she began reading the fine print on the accompanying document. It was a mineral and royalty deed.

"Basically I'm just giving them my royalties and mineral rights (if I sign it)," Kelley said.

Another red flag was when she called MTB Enterprises, the company that mailed her the check. The phone number was disconnected.

Reached by KTBS News, Michael Todd Burkheiser of MTB Enterprises in Lafayette said that while he was interested in buying people's mineral rights and royalties, the bank draft and letter were sent to Kelley by mistake.

"The paperwork that was sent out to Caddo Parish was erroneously sent out," he said. "It was sent out to make an offer with these landowners. The wrong form was then used by an employee and these landowners obviously started calling.

"We were interested in looking in the area to get with landowners to try to purchase royalty and/or minerals on their property," Burkheiser said. "Then this Haynesville Shale went crazy and we have since, for months, been out of the area."

Burkheiser said that when landowners called, he told them to disregard the letter.

The letter went out in May.

Kelley said she worries that people who don't read the fine print on an energy lease could wind up with too-few royalties or underpayment of bonus payments for drilling rights.

Warren Thornell, an oil and gas attorney in Shreveport, said he knows of several small speculators in the area. They are buying leases from individual landowners at a lower price, then turning around and making a substantial profit by cutting deals directly with the larger energy companies, Thornell said.

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