Anne Bucher  |  November 12, 2020

Category: Legal News

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Oil field regarding the Alberta farmers filing a class action lawsuit against AlphaBow Energy

A pair of Alberta farmers have filed a class action lawsuit against AlphaBow Energy Ltd. for allegedly failing to pay them according to their annual lease agreements.

Plaintiffs Reinhold and Thyra Kautz filed the class action lawsuit on behalf of themselves and a proposed Class of other Alberta property owners who have reportedly suffered significant damage to their land due to oil and gas drilling.

Kautz alleges AlphaBow, a privately-owned energy company based in Calgary, has failed to provide compensation as set forth in their contract terms.

According to the AlphaBow class action lawsuit, which was filed Nov. 4 in Calgary, AlphaBow sent a letter in May notifying landowners that it would put a pause on surface rental payments due to the impact of COVID-19 on the oil and gas industry.

“AlphaBow will review all outstanding rental payments in six months and will determine at that time what our plan is to catch up on outstanding rental obligations,” the AlphaBow letter reportedly said.

Plaintiff Says AlphaBow’s Refusal to Pay is Unfair

“Denying payment of the annual compensation is unfair to all of these farmers and ranchers who have allowed AlphaBow access to their lands for all of these years,” Mr. Kautz said in a statement. “There are many landowners that I know who have trusted these oil companies to deal with them fairly and now have no idea where to turn for help and feel helpless.”

Lawyer Matthew Farrell is representing the plaintiffs and says this class action lawsuit may be the first to be filed against an energy company for late lease payments.

“It’s the kind of injustice class actions are designed to remedy,” Farrell said.

“It’s a pretty clear contract,” Farrell said. “A deal’s a deal.”

“When times are good, it’s not like (landowners) are given bonuses,” Farrell said. “If it’s OK to treat them that way when times are good, then the oil companies should be (paying) when times are bad.

So far, the Kautzes are the only plaintiffs involved in the proposed class action lawsuit. However, Farrell says that there may be hundreds of landowners who have not received lease agreement payments from AlphaBow.

Lawyer: AlphaBow Class Action Lawsuit Is Groundbreaking

Farmer regarding the Alberta farmers class action lawsuit against AlphaBow EnergyAccording to the National Post, Alberta’s United Conservative government has provided the industry with a three-year exemption from property taxes on new wells and pipelines. Rural municipalities have reported that energy companies owe as much as $173 million in unpaid property taxes.

Many Alberta landowners are fed up with the situation and feel that they’re being shortchanged.

Lawyer Keith Wilson, who has experience involving similar disputes between landowners and industry, says the Kautzes’ AlphaBow class action lawsuit is groundbreaking.

“It’s the first time there has been any form of class action against oil companies,” Wilson said. “It’s a real sign of the extent to which the relationship and the normal institutions that have been in place to keep peace between two critical industries are faltering.”

Delayed Compensation Was An Issue Before COVID-19

Even before COVID-19 was declared a global pandemic, landowners were frustrated by delays in payments they were owed by oil and gas companies.

Earlier this year, a group of Alberta landowners tried to convince farmers and ranchers to close valves and cut power to energy company sites in response to the unpaid debts they are owed.

“These landowners need to safely shut down those surface leases, whether it’s safely turning off the power or safely shutting off the valve,” said Daryl Bennett of the Action Surface Rights Association in January.

The Action Surface Rights Association reportedly represents approximately 200 southern Alberta landowners.

“It seems like this (United Conservative) government is in industry’s back pocket and they’ll do whatever they need to ensure these companies are allowed to drill,” Bennett said. “There’s a huge rural backlash coming and it does not appear that the government recognizes this.”

The majority of Alberta’s 400,000 wells are reportedly located on private property. Under Alberta law, property owners cannot deny access to energy companies, and in exchange, the industry must compensate the landowners. These arrangements are regulated by the Alberta Surface Rights Board.

In addition to the delayed payments, many farmers are experiencing the effects of inadequate infrastructure. For some farmers, their ability to produce crops is reduced due to food safety regulations that prevent farming near contaminated sites.

Do you believe Alberta’s government is improperly favoring the oil and gas industry over landowners? Is a class action lawsuit an appropriate process for landowners to seek the compensation they’re owed? Let us know what you think in the comments below.

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5 thoughts onAlphaBow Energy Class Action Lawsuit Claims Money is Owed to Alberta Farmers

  1. Del Materi says:

    I agree with the above comments. We need to put more pressure on politicians to represent land owners/ royalty owners rather than the big oil companies only. Bombard your local MLA and vote in like minded members!

  2. Jim schmidt says:

    There has to be something done. Why should a company be allowed to buy another company take anything of value on these leases not pay the landowners there contacts then leave abandon wells for the landowners or government to clean up. They should be forced into receivership not living off the cream.

  3. Thorval Dyck says:

    I agree with above comments. This is a business relationship between parties and we have not, as of other neighbors, received a letter of payment options. I have reached out to Alpha bow and have had no letter, email or phone call explaining their situation. This relationship is being compromised by an Oil company and doesn’t sit well with landowners for the future. I hope they(The Oil companies) understand this when they come knocking in the future looking for access.

  4. Diane Cameron says:

    I completely agree with all the concerns discussed in this article. My brother and I never even received a letter explaining that our royalties would be suspended and were very puzzled about what was going on. It was information shared at the FHOA meeting December 12th 2020 that we learned of Alphabow’s financial collapse.

    1. Jim schmidt says:

      There has to be something done. Why should a company be allowed to buy another company take anything of value on these leases not pay the landowners there contacts then leave abandon wells for the landowners or government to clean up. They should be forced into receivership not living off the cream.

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