Replies to This Discussion

Permalink Reply by J B Nabors on June 28, 2013 at 3:08

Dead on, Henry! Although the new format may help to make those transactions more transparent, I predict that this thread will blossom like a mimosa!

And let us not forget, CHK is ignoring (or refusing to honor) many of the cost-free-royalty clauses in their contracts. That effectively obviates those clauses.

What's a person to do? Sue? YEAH, right!

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Permalink Reply by Spring Branch,mineral owner on June 28, 2013 at 4:20

I would say they are refusing to honor most of the cost free royalty clauses.  I wonder out loud if the State of Louisiana's leases call for cost free royalty and if so, I would say the odds are good they are being honored!

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Permalink Reply by Dion Warr, CPL on June 28, 2013 at 6:16

SB:

The state form contains cost-free language, but does allow for certain deductions for transport and/or compression of product for transport outside the field from which said product is produced if the point of sale or delivery for such product lies outside of the field.  The valuation for such product is also compared against "average price" (all sources) for product of like and kind in the field, or, if such pricing for such product is not readily available in said field, the average of prices posted for the three nearest fields thereto.  The state form also avoids valuation based upon "mouth of the well" and f.o.b. standards present in standard preprinted lease forms that has served as a fulcrum to "break" the cost-free provisions in the attached lease riders.

 

I would rate the odds that the state is being paid properly is probably higher than the average private landowner, but then again, they're the state, and we're not.  They have an entire division of employees charged with analyzing and auditing statements and payments remitted to the state on royalty oil and gas.  Considering that the state has sued every major oil company (and many smaller ones) operating on state lands or in state waters for underpayment over the years, "trust but verify" is still the state's m.o. on royalty payments, as it should be for any lessor.

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Permalink Reply by Brother in Law on June 28, 2013 at 3:08

They are still cheats when you have a lease that states the royalty is supposed to be without any of these costs an expresses and they still take it out. Now, they just want to rub your noise in it!

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Permalink Reply by Ms. Jessye Roux Conner on June 28, 2013 at 3:24

Thank You, for the update. It seems we Americans would All like to be , independent From All Other Countries. We have more everything here in our Country than they have over seas . Put our people to work & make people happy ,all the way around. It seems, between the conspiracies here in the ,US. Big Oil business ,is running everything. God we want what is under there too, for Everyone then everyone ,wins. Sorry ,this is not directed to you. I can't understand the continued put off, that will benefit " All "
Thank You So Much, for getting back with us out here.
Sincerely ,
Jessye

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Permalink Reply by elizabeth person on June 28, 2013 at 3:59

It will be very interesting to see how much my next check is.

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Permalink Reply by Steve Bacle on June 28, 2013 at 3:58

I don't know what they are doing, but last two months they have been going back to 2011 and paying me for months that they short changed me. I enjoy the extra income. :-)

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Permalink Reply by Mike Bradstreet on June 28, 2013 at 4:26

They have set themselves up for a class action LS Can't believe it not already going an easy slam dunk got some law firm

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Permalink Reply by Skip Peel - Mineral Consultant on June 28, 2013 at 7:48

Courts set the bar for certifying a class unreasonably high.  That is the reason there is a lack of class action litigation.  I've performed research for attorneys preparing suites. It's far from a slam dunk.

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Permalink Reply by Glenn Pickett on June 28, 2013 at 7:55

Mike, they do need to be sued, big time, but trouble is they can keep everything tied up for years.  A friend who contacted an attorney about suing another gas company told him to make sure his children were covered in his will, and that they were aware of the suit being filed, laughingly told him they may, not for certain, but may be around when the lawsuit would finally be settled.  I'm just saying it will cost lots of money, lots of time, and a long time being settled.

Glenn

 

 

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Permalink Reply by Lerret on June 28, 2013 at 6:58

They did not want you to know that they are taking out far larger percentages than their competitors

CHK paid $2.40

SWN paid $3.32 with 20% deductions ($2.66 equivalent)

So where did the other 26¢ go?  CHK deducted more than SWN...Now we are talking the same well, the same gas, the same gathering line....

 

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Permalink Reply by RONNY on June 28, 2013 at 8:50

I have been saying the same thing as Lerrett for two years.  Chesapeake always told me there were "embedded" costs in their price in addition to the shown deductions on my statement.  Embedded=Hidden

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