Why the H*#4@ did I sign a mineral lease?
Being part of a 640 unit is crap for the folks with small acreage. Its all a pyramid scheme. We all joined in this thing together to make money together...at least that's what the feeling WAS. I remember when the first checks were given out, many Shreveport natives boosted the economy for this area by shopping for big ticket items like cars, houses, etc. in hopes of getting more and better checks. But what did Chesapeake do? Send out Div Orders with stupid decimal points in the writings, such as .00003 for example. A lease in the beginning stated that the mineral owners would receive 25% of monies made. The Div Order to be signed states different rhetoric with that decimal crap. When I asked Chesapeake where did they get those numbers from, they answered me back with, "It's something we made up." Mineral owners are treated like the enemy. What if Walmart was in this situation? They own the merchandise, but the only folks who make the real money are everyone except Walmart, (except mineral owners). Doesn't make sense. Try doing the math with screwed up numbers such as .0003 and see what you come up with. A bunch of zeros after a decimal point adds up to horrific under payments made to the mineral owner, the ones who own the product. And where are the guys in my 640 unit who own tons of acres and made nearly a million dollars? would be nice if they shared their profits with us guys making 80 dollars to 500 dollars a year. I signed up because I knew it would benefit those with small acreage as well as those who own large acreage. My neighbors are in shock and most folks are embarrassed that their checks aren't more lucrative after receiving their initial payments of thousands of dollars, now we all get hardly anything. So much for boosting the economy for Shreveport.
Tags: 640, chesapeake, division, law, mineral, order, owners, payments, pyramid, rights, More…
Views: 8906
Replies to This Discussion
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Permalink Reply by DeeDee on
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Yes sir Mr Warr, I believe most here have showed patience with Mr Lee. Bobbi did a good job of showing the "long" math. Even if Mister Lee learns the formula for his decimal percentage, I fear it is the other unlearned fact that is his bigger problem. It is his mind set and so many others that encourages me to give the advice to Atlas to "shrug".
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Permalink Reply by Aubrey C. Sanders, Jr. on
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I cannot believe this after all the 'free advice" given by the professionals on this site. For those who cannot or will not put out the effort to understand this business I say give them 40 acres and a mule and let them drill their own well. This is not a share and share alike deal. It isI a proportional share deal. IMO that lease prices were way to high. Those who do not understand decimals need to go back to school..
..
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Permalink Reply by DeeDee on
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And there you go giving away land and mules again lol. Where do I sign up?
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Permalink Reply by Bobi Carr ("parker") on
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Amen Aubrey,
Like many others on GHS, I've found things to get annoyed with the gas companies about, but I've never lost sight of the fact that they DRILL the wells. They spend a heck of a lot of money to do so. The end result is that our country gets energy and we get a check.
It's called "mailbox money" for a reason. For most, that's all there is to getting the "free" money.
For those dirty scoundrels who have poured blood, sweat, and tears into owning acreage, we usually end up with the well on our property and not much more per acre than the complaining subdivision lot owners.
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Permalink Reply by Bobi Carr ("parker") on
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lee,
I challenge you to go see how hard the folks on a well sight work for you to have the privilege of walking to your mailbox for a check.
Or I'd like to see you put up your own money for the chance at a return on a well.
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Permalink Reply by Bigfoot on
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Lee:
I don't have any idea as to how many acres you have or how well you can do the math associated with royalties; however, I do know that we have a bunch of a--h--'s or oil company representatives calling the names and mouthing about Walmart, etc. and how proud you or we should be just to allow the oil companies to use our land and minerals for their benefit. There is no doubt that oil companies spend lots of bucks and need their just rewards and yes the workers wok their tail off to do their best to produce their product; however, these few seem to forget that the owner needs their "fair" share as well. Chesapeake and, yes there are many others, now and in the past that have and will do everything possible to take advantage of the mineral owner. Small acreage owners are at the mercy of the oil companies or the flippers that represent them. Many of them or the mouth pieces we are seeing here don't want to play fair.
Remember that most of us or our families have had this land and minerals for a long time and we are planning to be around way after this craze is gone. Consider that the money might be nice if it should ever happen; but, at what cost.
Just remember, that unless properly worded and thought out, a lease is basically a deed to your minerals and more than likely your surface as well. Allowing a "used car salesman" land man to talk you into signing a lease before a lot of homework is a prescription for the first disaster.
Hang in there!
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Permalink Reply by CB on -
This guy can't be for real. Let's do the math with $. Very simple. .4 acres divided by 3 people = .133333 acres.
Then you divide .133333 acres by 640 acres you get .00020833 Net revenue interest. Then we multiply your net revenue interest by 30.4 days in a month, then multiply by average daily production (let's assume 5 million cubic feet of gas per day), then multiply the price of gas (assume $3,500 per million cubic feet of gas), and there you go. $110/month is your fair and appropriate share, period!
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Permalink Reply by Dion Warr, CPL on
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CB:
Don't forget the reduction of 25% for the RI created in the lease on the tract as it lies within the unit.
.00020833 (net tract participation in a nominal 640 acre unit) x 25% = 0.00005208 RI
It may not be fair, but math states that a fraction of a fraction of a small fraction is a really small fraction.
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Permalink Reply by lee on
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CB, O&G is not forthcoming when it comes to the money from the wells. You guys are not as understanding of the math as you may think. Just does not make sense to leave the money out of the math equation. Even worse sense for O&G to own themselves as well as the company that buys the product from the themselves...lol
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Permalink Reply by Dion Warr, CPL on
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Lee:
One of my jobs is to coordinate land and lease analysis data (acreage, ownership reports, and title opinions), legal and title curative, and work with DO analysts to initial setups of paydecks for oil and gas clients. You may be surprised at the handle I might have on the math. That said... {deep breath...}
If you'll scan a recent pay statement (feel free to blot out your name/address/SSN data, I'm not interested in stealing your identity) and message it to me, I'll give it a look-see and try to answer some questions for you. You may actually have the data you need to answer the "what's the operator getting?" questions right in front of you, or you might have to reverse engineer the computations to "back into" the answer.
My gut feeling is that you will not be pleased with the results of the end analysis mainly because there is a fundamental miscommunication or misunderstanding originating from the time of the lease being negotiated as to what you're being paid for vs. what you thought you were going to paid for. But I'm willing to give it a whirl. If you'd like.
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