Providing yet another example raising questions as to whether oil and natural gas companies operate in good faith when they are paying royalties, on Monday the Denver District Court confirmed a case in which they didn't. In support of a November 2008 jury verdict, the judge found that Williams Production Company:
- Breached their contract by underreporting and underpaying the share of gas volumes, natural gas liquids sales and heating content of the gas;
- Breached their contract by overcharging for gathering and transportation related services and for other operational and payment issues; and
- Breached their contract's duty to good faith and fair dealing. (Author's note: no kidding.)
In total, District Judge Robert L. McGahey, Jr. found that the plaintiff, Celeste C. Grynberg (wife of industry whistleblower Jack Grynberg of Grynberg Petroleum) and Grynberg Trusts is owed $2,461,535.28. For more information on Jack Grynberg's pursuit of companies that underpay the royalty payments owed to taxpayers, go here and here.
-- Mandy Smithberger