Can anyone explain the contractual authority Encana is citing in order to reduce our June 2018 check by almost $27,000 from what was due? The statement contains 23 pages of entry reversals and reentries for each product, liquid and gas, on each and every lateral, from 12/01/2015 through and including 12/01/2016. Each reentry reflects a LOWER price paid for the product than the reversed entry.
Conventional wisdom suggests that Encana knew, or should have known, the price they paid for the products at the time of sale and original payment.
We are a relatively small royalty owner. If Encana is doing this to everyone, imagine the millions/billions? of dollars they are raking in through this process.
Oil/gas companies make such adjustments all the time and it drives me nuts. As for your adjustment on that check, that's a lot and I would email them for a paper trail and ask them.
Thanks, Hale! They tried to tell me that, due to an error, some of the oil that went into the tank was not mine. When I asked him why the only item adjusted was the price, not the volume, he couldn't answer me. He then told me that he had more BAD NEWS, that they were going to adjust my upcoming October check downward to recoup 2017. I have never seen an adjustment to the price paid retroactive for two years, and they will probably try to adjust 2018 next year. I don't buy it! They knew what they were paid for the products at the time of sale!
EnCana's is a public company in the US and Canada. Their financial statements, including what they were paid for their product sales are audited and their auditor is PwC. They may have made some prior period adjustments based on volumetric errors or owner allocation errors but a price PPA is unlikely.
Thanks, Joe, and that is my contention. They adjusted out every payment for every product made in 2016 and replaced each one where the ONLY change was the price and it was lower in every case!
I will also state that I have no knowledge of wrongdoing but I can say that I had conversations with Encana accounting officials regarding some interests I owned (that didn't make sense) and we went ring around the rosy, never attaining agreement. The way they were going about it was bass ackwards to me and silly. He never did comprehend what I was talking about. I have never seen a company report on their check stubs like they did and I have been involved in many, many oil/gas interests for over 40 years. They just did things really different.
When I spoke with their rep in Denver 4 weeks ago at 10:00 am he promised he would be back to me by lunch.....I still have not heard from him!