Case Document 253 Filed in TXSB on 07/27/16 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS

Transcription

1 Case Document 253 Filed in TXSB on 07/27/16 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS In re: ) Chapter 11 ) LINC USA GP, et al. 1 ) Case No (DRJ) ) Debtors. ) (Jointly Administered) DEBTORS RESPONSE TO MICHAEL G. PETERS LETTER TO THE COURT REGARDING ROYALTIES FILED ON JULY 6, 2016 (Relates to Dkt. No. 183) Linc USA GP, et al., the above-captioned debtors and debtors in possession (collectively, the Debtors ), by and through their undersigned attorneys, file this Response to Michael G. Peters Letter to the Court Regarding Royalties Filed on July 6, In support thereof, the Debtors would show the Court as follows: I. RELEVANT BACKGROUND 1. Together, the Debtors operate an oil and gas exploration and production business with a primary focus on the Texas Gulf Coast. Each of the Debtors is a direct or indirect subsidiary of Linc USA GP. Each of the Debtors is based in Houston, Texas. The Debtors properties are operated by Debtor Linc Energy Operations, Inc. ( LEO ). 2. On May 29, 2016 (the Petition Date ), the Debtors filed voluntary petitions for relief under chapter 11, Title 11 of the United States Code (the Bankruptcy Code ) in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the Court ). Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, the Debtors are 1 The Debtors in these chapter cases, along with the last four digits of each Debtors federal tax identification number, are: Linc Energy Finance (USA), Inc. (6684); Linc USA GP (5234); Linc Energy Resources, Inc. (9613); Linc Gulf Coast Petroleum, Inc. (6790); Linc Energy Petroleum (Louisiana), LLC (1074); Linc Alaska Resources, LLC (2362); Paen Insula Holdings, LLC (1681); Linc Energy Petroleum (Wyoming), Inc. (9859); Diasu Holdings, LLC (9626); Diasu Oil & Gas Company, Inc. (8926); and Linc Energy Operations, Inc. (5806). #

2 Case Document 253 Filed in TXSB on 07/27/16 Page 2 of 5 operating their businesses and managing their property as debtors in possession. No trustees or examiners have been appointed in these cases. 3. On May 30, 2016, the Court entered its Order Granting Motion for Joint Administration [Dkt. No. 21] and on June 1, 2016 the Court entered its Order Granting Complex Chapter 11 Bankruptcy Case Treatment [Dkt. No. 32]. 4. On July 6, 2016, Michael G. Peters, appearing pro se, filed a letter with the Court (the Letter ) [Dkt. No. 183]. In the Letter, Mr. Peters claims to own royalty interests in certain wells operated by the Debtors. 2 The Letter makes several unfounded claims with which the Debtors disagree. The Letter seeks alleged back payments from Shell Trading Company ( Shell ) on account of the claimed royalty interests. II. RESPONSE 5. First, in his Letter, Mr. Peters informs the Court that he has royalty interests in certain wells operated by the Debtors. See Letter I. The Debtors do not challenge Mr. Peters claimed royalty interests in the above-referenced wells. Attached as Exhibit A is a table generated by the Debtors containing a summary of the information related to Mr. Peters royalty interests. The information listed in Exhibit A directly corresponds with the information listed in Mr. Peters Letter. Thus, the Debtors are in agreement with Mr. Peters that he has valid royalty interests. 6. Second, Mr. Peters avers that Shell sold the wells in which he has a royalty interest to the Debtors just weeks prior to the Petition Date. See Letter III. This claim is not correct. The Debtors have owned the properties in which Mr. Peters has a royalty interest since October 2011 and the Debtors still own those properties (see Assignment, Conveyance and Bill 2 Mr. Peters claims an interest in the following wells: Armelin Fee #10; Armelin Fee #11; Armelin Fee #12; Armelin Fee #14; Armelin Fee #21; Armelin Fee #9; D Hannah #1; D Hannah #11; JC Baldwin Fee B #1 (together, the Wells ). #

3 Case Document 253 Filed in TXSB on 07/27/16 Page 3 of 5 of Sale attached as Exhibit B). There was never a transfer of the wells from Shell to the Debtors. Rather, Shell is a purchaser of hydrocarbons from the Debtors. Shell has, in the past, purchased the hydrocarbons derived from the Wells in which Mr. Peters has a royalty interest. Upon information and belief, Shell, as first purchaser, has directly paid royalty owners related to the Wells at issue here, pursuant to Texas Natural Resources Code et seq. 7. Effective February 1, 2016, the Debtors ceased selling hydrocarbons from the Wells to Shell, and began selling such hydrocarbons to GulfMark Energy ( GulfMark ). Consequently, Mr. Peters claim that Shell sold the property to the Debtors weeks before the Petition Date is incorrect; there was merely a change of companies who purchase the hydrocarbons derived from the property. Like Shell before it, GulfMark is now responsible, as the first purchaser, for paying royalty owners directly pursuant to Texas Natural Resources Code section et seq. 8. Third, Mr. Peters states that he is owed seven to eight months of back pay related to his royalty interests. See Letter III. However, the Debtors are not the party responsible for making royalty payments to him. Mr. Peters royalty payments are to be made by the purchaser of the hydrocarbons derived from the property, i.e., Shell and GulfMark. The Debtors do not possess payment histories for royalties paid by first purchasers. While Mr. Peters claims for those amounts may or may not be valid, those claims should be resolved with Shell or GulfMark independent of the Debtors and this proceeding. Contact information for Mr. Peters to resolve this information with GulfMark is: Division Order Administrator GulfMark Energy, Inc. P.O. Box 844 Houston, TX #

4 Case Document 253 Filed in TXSB on 07/27/16 Page 4 of 5 9. Finally, Mr. Peters claims that a scam is being perpetrated on him by the Debtors, and that the Debtors are engaging in illegal activity. See Letter V-VII. The Debtors are not engaging in any fraudulent or illegal activity. As explained above, Mr. Peters claims in his Letter appear to be based on a misunderstanding regarding the ownership of the property and the proper party that should make his royalty payments to him. III. PRAYER WHEREFORE, the Debtors respectfully request that the Court disregard the claims made by Michael G. Peters and deny any relief requested by Mr. Peters in his letter to the Court filed July 6, The Debtors further request that the Court grant the Debtors such other and further relief as it deems just and proper. Respectfully Submitted, BRACEWELL LLP By: /s/ Jason G. Cohen Jason G. Cohen Texas Bar No Jason.Cohen@bracewelllaw.com William A. (Trey) Wood III Texas Bar No Trey.Wood@bracewelllaw.com Chelsea Dal Corso Texas Bar No Chelsea.DalCorso@bracewelllaw.com 711 Louisiana, Suite 2300 Houston, Texas Telephone: (713) Facsimile: (713) COUNSEL FOR THE DEBTORS AND DEBTORS IN POSSESSION #

5 Case Document 253 Filed in TXSB on 07/27/16 Page 5 of 5 CERTIFICATE OF SERVICE On July 27, 2016, a copy of this pleading was served on Mr. Michael G. Peters by regular mail, postage prepaid as follows: Michael G. Peters # Michael s Unit 2664 FM 2054 Tennessee Colony, Texas By: /s/ Jason G. Cohen Jason G. Cohen #

6 Case Document Filed in TXSB on 07/27/16 Page 1 of 2 EXHIBIT A

7 Case Document Filed in TXSB on 07/27/16 Page 2 of 2 LEASE NAME ARMELIN FEE #10 ARMELIN FEE #11 ARMELIN FEE #12 ARMELIN FEE #14 ARMELIN FEE #21 ARMELIN FEE #9 OWNER INTEREST R R R R R R D HANNAH # R D HANNAN # R J C BALDWIN FEE B # R TYPE OWNER NAME ADDRESS ADDRESS ADDRESS CITY ST ZIP MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS MICHAEL GEOFFREY PETERS TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND TDCJ INMATE TRUST FUND # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX # PO BOX 60 HUNTSVILLE TX #

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