Is it true that Chk sells NG to a company it owns AND sells it for less?  Is this legal? What can we do to contest this? They have made some kind of error on % paid to us, plus other things that seem irregular to us. How can we check this out? Thanks. S

Tags: CHK, Royalties, and

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Call them out. Ask them through a local media outlet to explain themselves. If they are doing this to their royalty owners, it is theft plain and simple. It's criminal. Some loud and strong publicity should get their attention. JMO
Sam,
If you post your sonris well number, we can look up where the gas goes to. You can also go to the well, and see if you can figure out whose name is on the "take off pipe." If one of the workers is there, maybe he can help you figure this out.

You also need to contact Chesapeake and ask for an explanation of how the gas price reported on your monthly stub is determined. Several people have asked them, as a result of info posted on this site, but no one has received a response so far. Be persistent. Follow up your initial request every week until you get an answer. The people in their landowner relations department are overwhelmed (maybe they could hire more?), so be persistent, but polite. Don't let them stonewall you.

Also, please read my discussion, "What Price Are You Getting For Your Gas," and provide data. I'm building a data base of what prices people are getting, and it is obvious Chesapeake mineral owners are getting less.

Is it legal? We have no idea yet. Every lease is different, and we are still trying to figure this out.
I signed a lease with chesapeake (early), my neighbors signed with Petrohawk, but Encore has the majority of our section leased (over 450 acres). Encore is the company that drilled and maintains the well.
Even though we are all in the same section, Encore and Petrohawk pay the same amount (gas price) to my neighbors, while chesapeake consistently pays less. I have copies of neighbors royalty checks to compare. I have tried and tried for months to get an answer from chesapeake, as to why the discrepancy, - to no avail. They send my call to someone else, who sends it to someone else, etc. who never calls me back.

Also, chesapeake made a mistake (in their favor) with the % of royalty on the division orders they sent out. If one of my neighbors (who is also signed with chesapeake) had not compared the % to his neighbor (signed with Encore), we would not only be getting less on our gas prices, but would be getting less on our %. Chesapeake did correct the division orders after we brought it to their attention.
Dawn--write all your question in letter to CHK include your payee # and ID the unit and mail it certified mail to royalty relations department. They are required to answer you as royalty owner. Check you lease language about inquiries.
dawn,
adubu is right. You need to write to them. Explain why you are writing -- that you are receiving less for your gas than other landowners in your section. Before you write to them, compare your lease to that of your neighbors -- is there anything in your neighbors' leases that would result in them getting a higher price than you?

Before you write, collect all of this information:
payee #
well name, and location (section-township-range)
Quote the price you are getting, quote the prices your neighbors are getting

Ask for an answer to these four questions:
1) Who is buying the gas (affiliate or non-affiliate)?
2) Where is the gas purchased (at the unit meter or further downstream)?
3) How is the gas purchase price determined (reference to an index or not)?
4) What deductions are applied to the gas purchase price?

This will start the conversation. I know that one GHS member has had good luck getting answers to these questions via email. If you "friend" me, I can give you the name of someone at Chesapeake to contact -- I hesitate to put this person's name out in the public.
All I can say is good luck. I get mickey moused around by CHK on a regular basis.
Me too. I can never get a straight answer out of them.
Glenn replying: I did not get distillate royalties, they said the well was not producing any, yet there was an overflow of many barrels one evening. I went to their open house in Bossier City back in April, saw Mr. McCotter there, told him I had a problem, he showed me a gentleman to talk to, I did, he sent me to another man, I gave him letter expressing my concerns, he said he would take care of it, I went back by to the other gentleman, a Mr. Ronnie Brown, and he assured me it would be handled. As of June nothing had happened, no one had contacted me, I e-mailed him in August, still no response. Their PR dept. sucks, cannot get any response. They bought out our well from Empressa and no one from either company had the courtsey to let us know. They shut the well in completely around June 6th or so, so there is no gas flowing now at all. Very suspicious activities right after I gave the first gentleman my letter, they came and pumped out both the water and the distillate tank, from the top, instead of using the regular piping coming out from a couple of feet above ground. Very suspicious to me especially since they did this at around 10 P. M. after my e-mail.
Cannot find out what their plans are for the well, cannot find out why they shut it in, cannot find out anything. Just like a mushroom!!!
dawn,
You can also help us out. If you read my discussion called, "What Price Are You Getting for Your Gas?" you will see that I am collecting data on what prices people are receiving from each operator. The original thought was to see if there was a particular location that was better or worse, and whether or not having "cost-free" royalties made a big difference. However, after getting data from only a few people, it became obvious that the real issue is why was Chesapeake paying so much less to its landowners than anyone else. I have posted my data. So far, I have 30 contributors. However, I need more data. So, if you and your friends would send me your data to add to my database, I would greatly appreciate it.

I can tell you that Chesapeake is already hearing from landowners as a result of this discussion, and some are even beginning to get preliminary answers.
What data do you need? This sounds like an ENRON deal! I did email someone at Chesapeake this week, but haven't heard back yet. However, like Enron, we may only get answers that sound good and are not so. I don't know, but surely this practice is WRONG! Let me know what info you need...I am reluctant to give out the well no., but can give you the prices we got for the past yr or so. S
Sam--and Dawn--- if you get reply from CHK please share with this tread discussion their explanation on their prices paid to royalty owners--Thank you in advance for your input of this information--you can give this info generically without saying who or what well just general location parish in La. or County if Texas
Chesp. did reply and said they DO sell to a subsidiary of Chesp. Energy Corp. It is Chesp. Energy Marketing, Inc! Is this legal & how can we find out if they sell for less than the going rate? Thanks. S

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