royalty check wrong amount

just got our first check from CHK. our lease says 3/16 and they paid us 1/6.   if we cash the check, does that bind us to the 1/6 or will they have to pay us the difference?.   some say we should not cash the check and get an attorney. . . advise please

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Permalink Reply by Aubrey C. Sanders, Jr. on November 3, 2010 at 5:12
Have you tried talking to CHK owners relations dept? I would start there. I would not cash check before getting it straightened out.
Permalink Reply by Linda Whatley on November 3, 2010 at 8:53
Call Chesapeake and ask them if they sold an interest in your lease. That's what they did on one of my leases.
Permalink Reply by Jack Blake on November 3, 2010 at 9:12
All good advice. If you can't get it resolved as above then get a lawyer involved, unless you get other good suggestions. But Jack does agree you should not cash the check.
JB
Permalink Reply by Chad E Ellis on November 3, 2010 at 10:04
Is the 1/6 based on your net mineral acres in the unit? Your 3/16 rate is for your acreage only. If you own all of the acreage in the unit then your division will remain 3/16. If you only own a portion of the acreage, then your division will decrease. Example, if you own 640 acres in a 640 acre unit then you would figure your division as (3/16) x (640/640) = .1875 (3/16). if you only own 300 acres in the unit then your division would be (3/16) x (300/640) = .0878. My math may be a little off, but the theory is correct. If you can, tell us the amount of acreage you own and the size of the unit. This will really get interesting if you are in Texas, with the various unit sizes.
Permalink Reply by Katie McCullin on November 3, 2010 at 14:28
Hi Sue -

Please call our Contact Center at (877) CHK-1GAS. A Royalty Owner Specialist can go over all the details of your lease and advise on any action.

If you have any problems, please let me know!

Katie
Permalink Reply by Mac Davis on November 3, 2010 at 15:26
Don't cash the check. Even if it doesn't legally bind you, it's better to get it straightened out first.

Does it actually say "1/6" or does it express it as a decimal, such as "0.166667?"
Permalink Reply by adubu on November 4, 2010 at 0:37
SueBaby--- what was the decimal interest on your Division Order? When you signed the DO was the interest decimal correct with your calculation? Then compare it to the check you received to see if % decimal interest same or not --- contact Royalty Relations Department of CHK with your owner account #, gas unit, etc for them to review and explain to you -- you can call or email them same they will repley same day or within 24 hours to your email. Address email to Royalty Relation and phone # on CHK website
Permalink Reply by SueBaby on November 4, 2010 at 2:35
T 16N R16W Sec. 17 ..OK Guys, Here's the deal we found out.... They are saying we are bound under a lease signed back in the 1970's.... and then re-asigned in 1978 at 1/6 .. This old lease is suppose to cover 175 acres in the Wood Pines Div in the top west part of section 17 and part of the north west of section 16. our property in section 17 lot 6 , Buncombe Road subd . .. we leased with Greystone Oil & Gas in Feb. 20, 2008 at 3/16. our drive turns off of Buncombe Road .
Chesapeake say that leasen is not good.... we are bound by the old lease and will be forever....

Greystone says we are not involved in that according to their research and Chesapeake says according to them we are....
The decimal interest on the Div. order is 0.16666700 ( we did not sigh and return)

Now this lease on the Querbes 18 well which includes section 18 and sec. 17 and had 970.078589 acres
Permalink Reply by The_Baron on November 4, 2010 at 2:59
Sue,

Have cHK send you a letter to that effect. Request a copy of the old lease that they claim binds you. Also request recording information. Better yet, request a copy of the title opinion used for your division order and the attorney who prepared it. The attorney who did the title opinion may be able to save you a lot of time and effort.

It is quite possible the old lease is still binding. if so, any new lease would be bogus. If this is the case be glad you got some free money from greystone, but if you have a warranty clause, be careful as they could come back for their money (probably not though).

If you intend to challenge the validity of the original older lease you will need to hire a landman or competent O&G attorney to do the title work.
Permalink Reply by SueBaby on November 4, 2010 at 3:31
Barron..... Thanks so much... Evidently no one in this section knew this, so there are a LOT of people VERY upset.... We talked about getting an attorney, but what you say about the request is very smart.
This will give us all the paper work we need Before we go to an attorney and save a lot of time.

If Greystone wants wants their money back we all got $125 per acre. and they can file suite on me for that if they want.

Still open to all suggestions. You guys ares just super.
Permalink Reply by Linda Whatley on November 4, 2010 at 4:28
Good luck SueBaby, I hope everything works out to your advantage.
Permalink Reply by The_Baron on November 4, 2010 at 4:52
Sue,

I will say that if you are subject to an old lease it would be difficult to break it. I would imagine that CHk title is probally pretty good.

Also, you may want to request that Greystone file a release, just to clear up your title.

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