Chesapeake squeezes landowners on costs amid cash crunch - GoHaynesvilleShale.com2024-03-29T02:14:35Zhttps://gohaynesvilleshale.com/forum/topics/chesapeake-squeezes-landowners-on-costs-amid-cash-crunch?feed=yes&xn_auth=noBen---Thankstag:gohaynesvilleshale.com,2012-09-11:2117179:Comment:26971922012-09-11T18:55:10.811Zadubuhttps://gohaynesvilleshale.com/profile/adubu
<p>Ben---Thanks</p>
<p>Ben---Thanks</p> Adubu/Henry, in general Adubu…tag:gohaynesvilleshale.com,2012-09-11:2117179:Comment:26971002012-09-11T18:10:43.117ZBen Elmorehttps://gohaynesvilleshale.com/profile/BenElmore
<p>Adubu/Henry, in general Adubu you are correct. The wellhead or mouth of the well is the christmas tree, and so "market price at well head" is what it says. The question becomes, how do you determine market price that exists at a particular wellhead? In Texas, it is determined by the comparable sales method (looking at other similar sales in the same field), but if there are no such similar sales, then using the net-back method off the downstream price. The courts have sort of screwed…</p>
<p>Adubu/Henry, in general Adubu you are correct. The wellhead or mouth of the well is the christmas tree, and so "market price at well head" is what it says. The question becomes, how do you determine market price that exists at a particular wellhead? In Texas, it is determined by the comparable sales method (looking at other similar sales in the same field), but if there are no such similar sales, then using the net-back method off the downstream price. The courts have sort of screwed this up a little in allowing net-back to be used even when there are comparable sales, and more often than not, lessees use the net-back approach. In Louisiana, the net back approach is used. So yes, the market price at the well and net price will be identical. For the lessee, such as CHK, who is to pay royalty based on market value or amount realized at the wellhead if sold on the lease premises, the net-back method will be used and the net price will also be the lessee's gross price. So adding the phrase "gross proceeds determined at the mouth of the well" or similar clause, will not typically change the result. The best avenue for royalty owners in LA to pursue claims for underpayment even in the face of the lessee working around the cost-free royalty clause, is breach of the implied covenant to obtain the best price possible, which allows the royalty owner to point to other prices obtained by other operators in the field, and/or other post-production costs charged for similar services in the field, to show that the lessee has failed ot obtain the best price possible under the law. In Texas, such a claim is no longer possible in "market value" leases, but only in "amount realized" or "proceeds" leases. LA has not gone that route. . . .yet.</p> Ben,
To follow up on adubu's…tag:gohaynesvilleshale.com,2012-09-11:2117179:Comment:26966152012-09-11T01:50:57.017ZHenryhttps://gohaynesvilleshale.com/profile/Henry48
<p>Ben,</p>
<p>To follow up on adubu's questions... Where exactly is the "well head?" I've also seen lease language that talks about the "mouth of the well." Is that the same?</p>
<p>Ben,</p>
<p>To follow up on adubu's questions... Where exactly is the "well head?" I've also seen lease language that talks about the "mouth of the well." Is that the same?</p> Ben---is there any difference…tag:gohaynesvilleshale.com,2012-09-10:2117179:Comment:26962522012-09-10T22:53:59.946Zadubuhttps://gohaynesvilleshale.com/profile/adubu
<p>Ben---is there any difference in "market price at well head" and the "Net Price" after gas delivered at final point of sale at gross price-all the transportation pipeline,compression, and other cost to prepare gas to sell resulting in the final "net price" operator receives and then calculates royalty payment. This does not get into the subject of affiliates who may own the pipelines, trucks, or whatever that operator selling gas below market non-bid price at "the well head" . The affiliate…</p>
<p>Ben---is there any difference in "market price at well head" and the "Net Price" after gas delivered at final point of sale at gross price-all the transportation pipeline,compression, and other cost to prepare gas to sell resulting in the final "net price" operator receives and then calculates royalty payment. This does not get into the subject of affiliates who may own the pipelines, trucks, or whatever that operator selling gas below market non-bid price at "the well head" . The affiliate or in other cases the Broker is buying gas at the "Well Head" so for royalty calculation Net and Gross is one in the same. Is this one way the operator is getting around the Royalty Free Clause that has "market price at well head" in clause? What most royalty owner had alway thought if Royalty Free they were to receive the Gross price at final point of sale. CHK must be selling gas to their affilate at the well head at below market without any other Broker Bids therefore that their Gross/Net and NO deductions.</p> She would have to be, Ben.tag:gohaynesvilleshale.com,2012-09-10:2117179:Comment:26962402012-09-10T22:19:01.140ZSpring Branch,mineral ownerhttps://gohaynesvilleshale.com/profile/SpringBranch
<p>She would have to be, Ben.</p>
<p>She would have to be, Ben.</p> Ms. Dragonslaya, are you an u…tag:gohaynesvilleshale.com,2012-09-10:2117179:Comment:26962752012-09-10T18:53:11.581ZBen Elmorehttps://gohaynesvilleshale.com/profile/BenElmore
<p>Ms. Dragonslaya, are you an unleased mineral owner?</p>
<p>Ms. Dragonslaya, are you an unleased mineral owner?</p> Exco takes out for production…tag:gohaynesvilleshale.com,2012-09-10:2117179:Comment:26960292012-09-10T18:41:37.247ZMs.Dragonslayahttps://gohaynesvilleshale.com/profile/DebMurray
<p>Exco takes out for production costs from our family, too. We have acreage in De Soto Parish in Haynesville Shale and I get a billing for auto and truck expenses, chemicals pumps and repair, company labor, company labor burden (lol) and the list just goes on and on, so they do take it out of my royalty check!!!</p>
<p>Exco takes out for production costs from our family, too. We have acreage in De Soto Parish in Haynesville Shale and I get a billing for auto and truck expenses, chemicals pumps and repair, company labor, company labor burden (lol) and the list just goes on and on, so they do take it out of my royalty check!!!</p> Because the Texas SUrpeme COu…tag:gohaynesvilleshale.com,2012-09-10:2117179:Comment:26959612012-09-10T13:31:57.612ZBen Elmorehttps://gohaynesvilleshale.com/profile/BenElmore
<p>Because the Texas SUrpeme COurt has killed royalty underpayment class actions in Texas, your best avenue at pursuing a claim IMO is to get a group of royalty owners in the same well and join together in one suit. That way, an attorney looking at the economics of taking your case on contingency (wherein the attorney covers expenses; and only gets paid a fee plus recoups his expenses out of any recovery if you win) will consider the total potential damages of the group in relation to the…</p>
<p>Because the Texas SUrpeme COurt has killed royalty underpayment class actions in Texas, your best avenue at pursuing a claim IMO is to get a group of royalty owners in the same well and join together in one suit. That way, an attorney looking at the economics of taking your case on contingency (wherein the attorney covers expenses; and only gets paid a fee plus recoups his expenses out of any recovery if you win) will consider the total potential damages of the group in relation to the expense/risk of pursuing the case, and as a client, you will share the burden of case expense with the other royalty owners pro rata.</p> Go get 'em, mickie.
As a kid…tag:gohaynesvilleshale.com,2012-09-08:2117179:Comment:26947092012-09-08T16:51:23.679ZGoshDarnhttps://gohaynesvilleshale.com/profile/GoshDarn
<p><strong>Go get 'em, mickie.</strong></p>
<p><strong>As a kid who grew up way out in the sticks (many miles from the big-city lights) -- us Louisiana hicks had a saying about dogs.<br></br></strong></p>
<p><strong>It went something like this.<br></br></strong></p>
<p><strong>Once a soup hound got a taste for blood (when they killed their first chicken), then the dog would keep on killing chickens. That hunger would never go away.</strong></p>
<p><strong>CHK is the same way. They're not gonna…</strong></p>
<p><strong>Go get 'em, mickie.</strong></p>
<p><strong>As a kid who grew up way out in the sticks (many miles from the big-city lights) -- us Louisiana hicks had a saying about dogs.<br/></strong></p>
<p><strong>It went something like this.<br/></strong></p>
<p><strong>Once a soup hound got a taste for blood (when they killed their first chicken), then the dog would keep on killing chickens. That hunger would never go away.</strong></p>
<p><strong>CHK is the same way. They're not gonna change.</strong></p>
<p><strong>Gotta fight 'em every inch of the way. That hunger for landowner blood in their mouth is in the company's <em>crooked</em> DNA.</strong></p>
<p><strong>Like a rabid dog. <br/></strong></p> Fort worth Star Telegram just…tag:gohaynesvilleshale.com,2012-09-08:2117179:Comment:26946102012-09-08T14:07:36.996Zmickiebyrdhttps://gohaynesvilleshale.com/profile/mickiebyrd
<p>Fort worth Star Telegram just reported that CHK has settled a suit over royalties with DFW airport. Not sure of details. Im glad to see that I'm not the only one in this fight. I am in the barnett shale area and Chk does not show the deducts on our checks. I have no cost leases and all have same wording, CHK pays no cost on some and not others even iin the same unit,some wells are paid no cost and others are with deducts. That is how screwed up CHK is. Their business plan is to screw us…</p>
<p>Fort worth Star Telegram just reported that CHK has settled a suit over royalties with DFW airport. Not sure of details. Im glad to see that I'm not the only one in this fight. I am in the barnett shale area and Chk does not show the deducts on our checks. I have no cost leases and all have same wording, CHK pays no cost on some and not others even iin the same unit,some wells are paid no cost and others are with deducts. That is how screwed up CHK is. Their business plan is to screw us until we make them stop. I am looking to join any suit in Texas against them. If anyone has any details on one please let me have info. Mean time lets all go express our feelings on their facebook page, this may help some unsuspecting owner in deciding not to lease to them.</p>