landowner

Understanding an unleased mineral owner well report from Chesapeake

My investors finally got put in as unleased mineral owners on 5 wells in one section with Chesapeake. They get their first check this week ( after owning the property 20 months). First check has 10 spots and each say January 2019 Cutback and an amt. They get the total of the amount which is certainly no where near what they are due. A day later they get a copy of well EXPENSES but not well production but we can look that up on Sonris. The only thing the report says is PERIOD 1. It doesn't have ANY dates. I have been in touch with their legal dept. and they don't know what it means. Said they have to wait until revenue tells them. Has anyone experienced this. Does anyone know how Chesapeake defines Periods 1, 2 etc without any chronological data.

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 15, 2019 at 6:46

Welcome, Robert.  Your advice is spot on.  Thank you.  In my experience,  a demand letter originating from a mineral owner is more often than not ignored here in LA even if properly written and sent.  A demand letter from an O&G law firm known for litigating is viewed differently.  Although the cost to have an attorney send a demand letter is pretty modest, the good ones will decline to send a letter if a client does not commit to follow up with a suit if the demand is ignored.  Firms with a reputation of bringing good suits are viewed differently by operating companies than those that fail to litigate.


Oil & Gas ProPermalink Reply by Robert mcintyre on March 15, 2019 at 7:35

yes.  It really leaves the small owner with few choices.  There has been some success with lessors and royalties through class action firms, but nothing that I am aware of in the forced pooling/cost area.  Thanks for your comment.


landownerPermalink Reply by kittycatmama on March 15, 2019 at 14:38

Thank you for your reply and for you info, Robert.

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