Chesapeake Stops my Royalty Payments

I didn't receive my April royalty payment from Chesapeake.  When I called to ask why, I was told that my unit had been audited from the first day of production (which was 10/1/10) by a "third party."  I was told I am not permitted to know the name of the third party nor am I allowed to see or know details of the audit because I do not have an operating interest in the wells.  Supposedly, CHK mailed a letter to me on the 29th of April; however, having already been told what I not permitted to know, I don't expect the letter to be very informative....other than they are now taking my royalties.  Given the fact they have cheated me from day one of production by charging exorbitant expenses and, even at one point tried to con me out of my bonus money, I am not surprised by this turn of events, but I am mad....really mad.   However, the CHK rep told me I shouldn't be upset because they are not taking "my" money...really, it is "their" money. 

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Permalink Reply by Franks on July 11, 2015 at 8:50

 The state Attorney General is defined as the state's Chief Legal Officer. Go to the Chief. Substantial complaints and they typically to to war for both state and consumer issues. They've handled several issues for me. Typically, do your homework and hand them a good case, where they open an investigation of their own; settle things quickly and fairly.  Sets a fire under them (literal).   

LA State Attorney General's Office (LA Chief Legal Officer):
Crime,Corruption,Consumer Protection: 
1885 N Third Street, Baton Rouge, LA 70802
Ph: 225-326-6079, Email: ConsumerInfo@ag.state.la.us, 
https://www.ag.state.la.us

Permalink Reply by Bacon on July 16, 2015 at 2:05

Judy, Our property is in Red River Parish. I think Joe has good advice for you about contacting the AG. It doesn't sound like our situation is as serious as yours is at this point but we will see if it continues going forward.

Permalink Reply by Judy McDaniel on July 18, 2015 at 6:57

Thanks, Bacon.  I have written the AG today and I believe I have furnished proof positive of tax fraud to the AG because CHK's severance tax charges are higher  (50%) than FCX's as it shown on the 1099s.

Also, the revised statement CHK has furnished to me shows changes in production numbers.....wonder if the State has a record of changes in production numbers going back to 2010?  I am going to find out.

I also know several folks in my unit and I am in the process of contacting them to see if QEP has adjusted their royalty payments back to 2010.

It's actually been a fun project....I know CHK is cheating me and I hope to become a thorn in their side.

Permalink Reply by ME on July 22, 2015 at 1:03

Judy, the McDonald is winning, and winning lawyer fees too, according to this link below, and correct me if I'm wrong, but I also read that their fees only include past royalties and not corrected future royalties..   

http://www.gohaynesvilleshale.com/xn/detail/2117179:Comment:3517721

Permalink Reply by tc on July 22, 2015 at 1:20

First and most importantly this only applies to Texas.  Second the court was very divided with a 5-4 decision and the ruling only applies to a highly specialized leased in a very specific case.  Was your lease exactly like this "The nine-page, single-spaced document says the family would receive royalties of 25 percent of the gas’ value at the well, free of any costs from production and processing." and the case involves overriding royalties.

Its a good win for the Hyder family, but their attorney had this to say about the broader impacts

Drez argued that this case involved a specifically negotiated, heavily tailored lease, and that the court’s decision states “that each lease and contract will have to stand on its own.”

Still, the case “is an important guidepost for royalty owners because the general perception, whether it be right or wrong, is that they don’t stand a chance against the operator,” Drez said.

Permalink Reply by Skip Peel - Mineral Consultant on July 22, 2015 at 3:15

Those who engage the services of an "experienced" O&G lawyer, and have a detailed and comprehensive lease like Hyder, stand a much better chance of prevailing in a court of law. 

Permalink Reply by Henry on July 12, 2015 at 6:55

For all of you who think CHK is cheating you, I suggest you contact the McDonald Law Firm, and see if they will take your case.  They have 20,000 clients already suing CHK for underpayment and unreasonable fees.  I'm sure they would take your case.

Most small landowners cannot afford the financial burden of a law suit.  So let McDonald do it for you for free.  They only take money if they win for you.  Give them a call, and see if they are right for your needs.

Permalink Reply by William Howard Pritchartt on July 12, 2015 at 13:49

Well thank God you allowed to solicit and break site policy and not have your post deleted.  I have been attempting to do a benevolent solicitation but seem to be viewed as some type of con artist.  I think this is great and long overdue.  I suggest anyone seeking relief from companies other than the operator mentioned herein to contact me for the same reason.  

I reside in Houston, TX and dare not be more specific due to site policy.

Permalink Reply by Skip Peel - Mineral Consultant on July 12, 2015 at 14:02

William, there is a solicitation policy for several good reasons which may not be obvious to those who are not long time members. Don't take it personally.  GoMarcellusShale had real problems recently and many members complained when the solicitation policy on that website was made more liberal. Give some people an inch and they'll take a mile. Henry's post concerning the McDonald Law Firm does not violate the policy because it does not contain a link, a phone number or an email address. Additionally there is an ongoing thread, many months old, on the topic so it's old news except for Henry's period updates which many members have requested.

Permalink Reply by William Howard Pritchartt on July 14, 2015 at 15:38

This being my 3rd attempt to respond the first two not successful in final post as they disappeared I will be brief.

I understand and agree with site policy to deter solicitation due to nefarious dealing to prey on those owners less sophisticated in matters in of oil and gas.

I suggest a screening option be provided for anyone wanting to post contact info to behoove those who may stand to gain from a post provided it is from one with purely benevolent intentions without any personal monetary gain in the post.

Permalink Reply by Skip Peel - Mineral Consultant on July 14, 2015 at 15:43

William, all you have to do is click on Judy's name in blue, or any member's name, and you will be redirected to their personal page.  There you can provide them with whatever information you wish.  Information that, by site policy, you can't post in an open discussion thread.

Permalink Reply by William Howard Pritchartt on July 14, 2015 at 15:57

Thanks Skip!  I had dinner with John Weisenhorn and some of his family this evening as they are in Houston for a few days.  

We talked about what a wonderful site GHS has become insofar as being helpful to both mineral/royalty owners as well as professionals working in the energy field.  I named three professional site members I held in high regard you being one of the three.  That was my first meeting with John after several years since we first did business in a royalty trade but communicate quite often.  I have never me you or the other two I mentioned but hopefully one day I will meet all of you in person.

Regards,

Howard

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