Onco has almost become a four-letter word in the farm country of Chatham- Kent.
That’s where the Londonbased petroleum exploration firm signed agreements with property owners for the rights to natural gas, oil and wind.
But bounced cheques and late or missed payments have some landowners upset at Onco and unlikely to renew their agreements. And that’s noteworthy for a firm whose major asset is those leases that will let it carry out its game plan to revisit old gas and oil deposits underground and create wind farms as it touts its value to investors now that it is a publicly traded company.
The amounts aren’t large – compared to Onco dealings that prompted disputes with landlords, contractors, business partners and investors.
Onco is being sued for $27.5 million US by a Los Angeles entertainment company over a 2006 sub-leasing agreement for office space in Santa Monica, Calif. The lawsuit also names Onco chief executive Robert Vanier. The MGM Grand Hotel in Las Vegas recently won a $441,000 judgment against Vanier for gambling debts. The Ontario Securities Commission has banned Vanier and other Onco directors from trading in company shares because it failed to file an annual report for 2007.
In Chatham-Kent, the rights payments to farmers from Onco are for as little as $400 a year in some cases. “It’s so hard for farmers,” concedes Ralph Brodie, president of the Kent Federation of Agriculture. He said leasing agents often browbeat farmers to sign agreements, “but once they sign you up, they forget you.”
Brodie hasn’t had dealings with Onco, a fact he says relieves him. Some farmers haven’t received any cheques at all. Brodie’s brother-in-law, Ed VanDeWynckel, has a 400-acre cash crop operation in the Merlin area that has about six or eight capped former gas wells. Onco bought his natural gas rights for $10 an acre and wind rights for another $10 a year.
This past winter, cheques from Onco for his wind and gas rights bounced. He complained to Vanier, “who promised to do better.” Replacement cheques were issued. This topped two years of late payments that prompted him to complain to Onco, VanDeWynckel said.
Every time he threatened to cancel his deal for lack of payment, cheques would suddenly arrive, he recalls. VanDeWynckel said he complained directly to Vanier about the ongoing problem in his five-year deal. “If there was a way we could get out of it, I would do it,” he said.
VanDeWynckel said a reputation for non-payment in farm country spreads quickly. Vanier could not be reached for comment. A few farm-fields away from VanDeWynckel, Gerry Baetsen said he hasn’t been paid by Onco for two years.
“I called them a couple of times and they told me they had issues with the people who were issuing the cheques and stuff like that,” Baetsen said.
“They told me the cheques were in the mail . . . but it never, ever arrived and I got tired of it.” Baetsen recalls a representative of Onco signing him up nearly five years ago.
“They approached me and they offered me $10 an acre and I thought that was better than a kick in the ass,” said the pragmatic cash-cropper. His payments were to be $400 a year. Baetsen said after receiving cheques as expected for the first two or three years, things changed for the worse.
“It’s not worth the hassle” of having to continually badger Onco for money, he said, so he has basically given up. Baetsen said he will likely “think twice” before renewing any rights with the company. Ron Dixon, a farmer from the Tilbury area, said he’s had problems with late cheques but Onco recently hired a local man to act as liaison with property owners.
He’s hopeful his outstanding payments will soon be addressed.
By Chip Martin
20 June 2008
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