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“Stanky threatened Grant after he pressed charges for a poaching incident last year. Judge McIntyre threw the book at him, confiscating his gun and hunting privileges. I talked to Stanky, and it raised a few red flags. For one, he had a bottle of the same scotch we found in the flask. I sent it to our lab for testing. Haven’t got the results back yet.”
“So, is that your entire list of suspects?”
“No, there’s more: Sarah Koehler, the wife. I’ve been digging into her finances, and she stands to inherit a lot of money now that Grant’s dead. There’s a life insurance policy and also money coming from the business. Sarah initially blocked the autopsy, supposedly for religious reasons. She also had access to the flask kept in their basement. On top of that, patrons in the bar overheard her arguing with Grant about their daughter’s expenses, and she threatened him in public.”
“Last but not least, there’s Eddie Koehler at the top of my list. He owes $100k to the casino. He had access to the poisoned flask, and a waitress overheard him in the bar telling someone that Grant was his biggest problem. When I spoke to Eddie, he argued he couldn’t be involved because he’d been poisoned himself. At first, that made sense. Later I started thinking… who's to say he didn’t poison himself with a trace amount, knowing it wouldn’t kill him, to deflect attention? Eddie Koehler still remains a definite person of interest to me.”
“So Reed, answer me truthfully. Are you gonna be able to close this case, or do I need to assign other deputies? Sounds like you have a lot more suspects than answers. I can also request assistance from the State Police if needed. We seldom get murder cases around here, and the pressure on me grows daily.”
“No, Sheriff, I’ve got this. I know there are still lots of suspects, but I’m honing in on them and will get to the bottom of the case. I’ve been on this from the start, and pulling in other officers would just slow me down. Just give me a bit more time.”
“Ok, Reed, I will leave things as they are for now. I need regular updates, and you come to me personally if you need anything at all. This is your number one priority. I don’t want you to work on anything else until this case is closed. Don’t make me regret this.”
“I definitely won’t, Sheriff.”
Stassin left the office and got into his patrol car to continue his investigation. The meeting had gone as well as possible from his perspective. He definitely didn’t want to bring other law enforcement officers into the case. Deep down, Stassin saw the opportunity that solving this case could bring to his career. Sheriff Johnson wasn’t running for re-election after this term. This information hadn’t been released publicly, but he’d told several officers under his command. Stassin was considering the idea of running for sheriff himself. He saw this case as the lynchpin for his campaign. It would help his chances immeasurably if he could solve this case. Reed imagined himself sitting in the sheriff’s office and being in charge of the whole department as he hurried down the road to his next stop.
***
Jeff Koehler rushed to a meeting in town with Rich Wrobleski, who’d been anxious to meet with him. Rich left several messages saying there were some developments on the oil lease front they needed to discuss. Jeff’s focus had been on Grant and his murder since it happened. He finally agreed to carve out an hour for Rich. Jeff now realized how much stuff Grant handled on behalf of the camp. Grant dealt with most financial matters and issues like oil leasing rights. Jeff now felt he had to step up and find out what Rich had to say.
As he pulled into the small building on the edge of town where Liberty Oil leased an office, Rich greeted him as soon as he walked in. “Jeff, thanks for making some time for me. I know this is a difficult time for you, and I am sure you’re very busy. I promise to make this short and to the point.”
“Thanks, Rich. It has been a rough go. Sorry I didn’t get back to you sooner, but you know how it is.”
“I feel terrible about what happened to Grant. He called me just a week before he died. His message said something about wanting information on directional drilling in the county. Unfortunately, we never connected before he died, so I couldn’t respond.”
“Let’s get started so I can get you out of here as soon as possible,” Rich continued. “You know I’ve been working on getting a new oil lease on your property through my company, Liberty. Superior Oil controls most of the leases in this county. Certain things have come to light that shows they aren’t working in the best interest of landowners. I’d like to update you on some recent developments.”
“By all means. Go ahead.”
“Ok, here goes. In the oil leasing business, there are things landowners need to watch for that can materially affect their lease payments. There are two basic types of lease royalty plans that oil companies use. The first type is called gross royalty. This means the landowner gets paid their negotiated percentage of oil or gas extracted from their property based on the total volume. The second type is called net royalty. Under this arrangement, the oil company can deduct production and other costs from the proceeds paid to landowners. Typically the contracts specify what expenses the company may deduct, but oil companies like Superior are experts at finding gray areas to increase their allowable deductions. Now it doesn’t take a genius to see that a gross royalty arrangement is far better than a net royalty because it eliminates these deductions. It’s a much more straightforward transaction.”
“The type of leasing arrangement offered can be a huge problem for landowners because they typically don’t read the fine print of the lease.” Rich held up an actual lease contract to illustrate his point. “Landowners tend to be very happy when an oil company agrees to pay them something each year, whether they drill or not. They also know that they get a percentage of any oil extracted. It’s rare when a landowner actually reads and understands the fine print dictating exactly how payments are calculated. In Stoneman County, Superior Oil holds about 90% of all oil leases. I’ve examined many Superior lease contracts with local landowners, and every single one I’ve seen is for net royalties. Many landowners aren’t getting a fair return on the deals. My company, Liberty Oil and Gas, never does net royalties. All our contracts are gross royalties, which is the only way to be fair to landowners. We’re finally starting to make inroads in the county. Superior misleads them by offering a larger percentage of the proceeds. However, our leases are much more lucrative because we pay based on gross, not net. Let me stop for a minute. I know this can be complex. Are you following me so far?”
“I think so. I‘m hearing that Superior has tricked landowners into thinking one thing, while in reality, they pay much lower proceeds due to this net royalty thing.”
“Right. On a typical lease, one of our customers will receive an average of 32 percent more each year if we find oil than if they go with Superior. But this isn’t the end of it. There’s more. Have you ever heard of a concept called directional or slant drilling?”
“No, I can’t say that I have.”
“Picture an oil rig drilling straight down into the ground. Traditionally that’s the “old school” way they extracted oil. Sometimes you hit oil, and sometimes you don’t. A new approach came out of the oil industry in Texas called directional or slant drilling. With this method, the shaft goes in at an angle as opposed to straight down. Studies have shown that slant drilling covers more area resulting in a higher percentage of successful wells.”
“That makes sense,” Jeff agreed.
“Yeah, it does. Now I dare say that few landowners even know if their wells were vertically drilled or slant-drilled. Even fewer probably care. However, this can become very important for one main reason. Sometimes during slant drilling, the shaft can actually encroach on a neighbor’s property and extract oil that they may not have a claim to. Also, sometimes a pool of oil beneath the surface is large enough to lie on two different properties. These issues have arisen in Texas and have now spread to Michigan. There is a significant court case right now where a landowner brought a lawsuit against Superior for slant drilling. The lawsuit alleges Superior illegally extracted oil from a pool under the neighboring landowner’s property. Most people think Superior is likely to lose this lawsuit. This will create a situation where other landowners have a claim against royalties already paid out by Superior. Also, it may dictate new oil leases be contracted because some current landowners are extracting oil that belongs to neighbors. Superior keeps all this data very secretive. As I said earlier, most landowners have no idea what type of well they have.”
“The discovery, in this case, is forcing Superior to disclose details that have never been public. This could impact you because you might have a claim against Superior for a slant well drilled into your property. Even if this is not the case, you might be a great candidate for a new lease because you shouldn’t trust Superior. Remember when they told you guys your first well came up dry? I wouldn’t believe it if it were my land. It’s to the oil company’s advantage to keep their findings confidential and not inform landowners. They may have found oil, but they didn’t want to extract it yet, for many reasons. They can be really sneaky and cap the well, waiting for a better price in the future. I hope, when this dust settles, you will go with us on the new lease. We’re honest and will take care of you like a real partner.”
“Wow, that’s a lot to digest, Rich. It sounds promising. Grant wanted to talk to me about some issues, and I now know this was one of them. I’m sure you’ll keep me in the loop as this gets sorted out in court. Do you think it will be a long time before it gets resolved?”
“No. The case is proceeding rapidly. I expect a decision to come down soon. If it goes as most expect and Superior loses, it’s going to turn the whole oil business in this county upside down. I’ll certainly keep you posted and will be in touch as soon as anything breaks. Thanks for the time this morning.”
“Thank you Rich. Very worthwhile meeting.”
***
Shortly after Jeff left the meeting with Rich, he received a call from Deputy Stassin. “Jeff, I wanted to let you know about my interview with Tim Starks. ATF records showed he did own a 30-06 deer rifle like half the people in this county. When I asked Starks to produce the gun, he claimed someone stole it six months ago from his garage. He says he didn’t report it because he thought it would be a waste of time. He guided a group of bowhunters on the day Grant got shot at. However, Starks claims he stayed with the hunters the whole time, and they will attest to that fact if asked. This guy is a real piece of work, but my gut says he wasn’t involved. He may be involved with other illegal activities, like weed, but I don’t get the sense he had the balls to kill Grant.”
