We received our first check from Chesapeake today on the Thrash Unit.  The check

is for April, May & June 2012.  Has anyone else checked the prices they are paying?

In April, Chesapeake paid 84 Cents;  in May, Chesapeake paid $1.50; in June,

Chesapeake paid $1.77.   

 

Does anyone else know the ACTUAL price that Natural Gas was selling for in

April 2012, May 2012, & June 2012?

 

Does the TRRC need to be notified?  I do know that all state agencies have a

complaint department.

 

Everyone should check every detail of the payments they receive.

 

 

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Are those prices (I assume $/mcf) after costs were deducted?

That would be my guess.  CHK typically only reports a net unit price on their royalty check stubs, and reports no deductions.

It is interesting that on DrillingInfo for this well, only pricing data for May is shown, and it is reported that 125,410 Mcf was sold to their affiliate CEMI at $1.34/Mcf.

CHK's Durham well next door - May production sold to CEMI for $1.43/Mcf

Received check Sept 5 for the month of june 2012

1.47--1.60==1.57==1.63 One unit paid nothing

Chesapeake underpays Prices should be in the $2 plus range , just guessing, you can look it up.

Roy---CHK is screwing every one-- on a CV lease in Rusk County-- NFR recently purchased from SD-- my gas in May was Gross---2.10 (net 1.82)  and June---- 2.62 Gross (Net 2.24 after all deduc including serverance tax) that was gas only does not include NGL or Condensate

Andrew,

Thank you for your reply.  I am looking at the check.  I will explain to you what I see

on the stub portion of the check.

04/12; Price .84; IT 2; PYGP 61; Volume 86,827.17; Tax 5,539.56; Deduct 0; Net Value 67583.10.

They used the net value of the gas and my correct decimal interest  to figure my payment.  What concerned me was the price at which they sold  the gas.

I do know enough to know that gas never sold for .84.  

I am in units with other companies and each month I do feel that their calculations are closer to the

truth.   

 

The price is a net price, not a gross price.  The deduct of 0 would not be 0 if they quoted you a gross price.

I don't have too much experience looking at pay statements beyond knowing that they are difficult to decipher, but it is hard to argue with Ben's logic.

I have reviewed many CHK statements for clients in the past and have spoken with CHK in-house counsel about their statements.  The price is indeed a net price, meaning net of deductions, and they do not list any deductions in the deduct column since they are quoting you the net price.  So what is the gross price and how much are the deductions you may ask?  You will have to ask CHK and if you are lucky, after a month or 9, you might get a straight answer. 

wrong, no straight answer from chk

Ben-- CHK must be selling gas at Gross/Net price one in same into affiliate pipeline near the well. Pipeline buying gas at that point. Then pipeline reselling gas at final destination adding their profit including transportation therefore hiding true Gross price. This is one way CHK gets around Royalty Free Clause without paying transportation cost for that individual well and screws royalty owner. Maybe royalty free clause could be written to prevent this?

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