A landowner’s request for $62,000 revenue from an oil lease is being researched.
Ponoka County resident, Cam Falt, who owns a property along Secondary Highway 611 and Range Road 12, has made the request to county council Feb. 12 during the regular meeting.
Council was told the property was among the many tax recovery lands acquired in the 1950s and that the original oil lease contract was signed with the county, as the landowner, back in 1959. A caveat in the contract noted the county would continue to receive the lease revenue for as long as the contract remained or the well was “no longer capable of production.”
Cenovus Energy sent a letter to Falt Jan. 28 confirming that the well closed in 2002 and has been rendered incapable of production.
CAO Charlie Cutforth stated it was that specific phrase that is the bone of contention for Falt, who believes he is entitled to the lease payments dating back to 2002 when the well was shut-in.
“It’s not the county’s intention to get involved in a legal argument and his position is the county owes him the $62,000 in lease payments from the last 17 years,” Cutforth said.
“So, the issue has been sent to our legal counsel for advice and review of the contract’s language and determine if there is any validity on the retroactive request given the terminology that is being questioned,” explained Cutforth.
Within a 1963 purchase agreement with the Falts and the county, it states that Ponoka County reserves the surface rights pertaining to commercial well sights contained on the land, “…and the county will retain these surface rights so as to receive the rental therefrom for petroleum purposes until the well is no longer capable of commercial production.”
“Thereafter the surface rights shall belong to the Falts and any caveat or other documents registered against the title to protect the interests of the county in this agreement shall be removed by the county at the expense of the county,” the agreement continues.
Falt has requested the caveat be removed.
Falt sent a few letters to Tom Webber, ACAO, pointing out that since the well was capped and abandoned in 2002, he should receive the revenue. “At that point the lease rental should have gone to the current land owner as per the original agreement between the county and land owners,” he said in one email.
Falt did ask that the matter remain private but it is believed that as it relates to the use of public funds it is a public issue.
The county did decide starting in 2019 revenue will go to whoever owns the land.
Company in receivership
Another energy company, this one called Questfire, has gone in to receivership and the receiver is looking for some relief on the taxes. Council approved a motion that will cancel about $29,400 in property taxes and penalties that accrued before the company was taken over by the receiver in November 2017. The agreement will also see the receiver keep up with the payment of taxes in regards to post-receivership activity until the company is sold off.