County royalty owners arm themselves for war - GoHaynesvilleShale.com2024-03-29T13:41:59Zhttps://gohaynesvilleshale.com/forum/topics/county-royalty-owners-arm-themselves-for-war?feed=yes&xn_auth=noMoodys Downgrades Rating for…tag:gohaynesvilleshale.com,2015-10-07:2117179:Comment:35459702015-10-07T10:13:08.291ZFrankshttps://gohaynesvilleshale.com/profile/dellb
<p><strong>Moodys Downgrades Rating for Chesapeake Energy<br></br></strong><span>UPI: By Daniel Graeber<br></br><br></br></span>Moody's forecasts negative cash flow for 2016 for U.S. shale player.</p>
<p><span class="story_dl">NEW YORK, Oct. 6 (UPI) --</span> The credit rating for U.S. shale player Chesapeake Energy was downgraded because of cash flow problems in the weak market, Moody's said.</p>
<p>Moody's Investors Service downgraded the corporate rating for Chesapeake Energy Corp. by one notch to Ba2.…</p>
<p><strong>Moodys Downgrades Rating for Chesapeake Energy<br/></strong><span>UPI: By Daniel Graeber<br/><br/></span>Moody's forecasts negative cash flow for 2016 for U.S. shale player.</p>
<p><span class="story_dl">NEW YORK, Oct. 6 (UPI) --</span> The credit rating for U.S. shale player Chesapeake Energy was downgraded because of cash flow problems in the weak market, Moody's said.</p>
<p>Moody's Investors Service downgraded the corporate rating for Chesapeake Energy Corp. by one notch to Ba2. Moody's Senior Vice President Pete Speer said the downgrade came as a result of <a class="tpstyle" href="https://www.moodys.com/research/Moodys-downgrades-Chesapeake-Energys-senior-notes-to-Ba3-negative-outlook--PR_336021" target="_blank">weak cash flow</a> and the toll taken by lower natural gas and crude oil prices.</p>
<p>"Chesapeake will have to execute on assets sales and other transactions to meaningfully reduce its debt levels to better align its capital structure with the current commodity price environment," he said in a statement.</p>
<p>Energy consultant group IHS warned the depressed crude oil market could limit the borrowing options for North American exploration and production companies like Chesapeake.</p>
<p>The company, which has headquarters in Oklahoma, said in a September filing with the Securities and Exchange Commission it was <a class="tpstyle" href="http://www.upi.com/Business_News/Energy-Industry/2015/09/30/Chesapeake-latest-oil-price-casualty/7001443605086/" target="_blank">cutting 15 percent of its workforce</a>, or around 750 employees. Explaining the layoffs, the company said it was aligning its workforce to the business environment brought on by the sustained slump in energy prices.</p>
<p>Moody's revised its overall forecast for Chesapeake from stable to negative. Trajectory moving into 2016 should continue to move lower for the shale company.</p>
<p>"The company's low cash flow generation will likely result in negative free cash flow in 2016," the ratings agency said. "Moody's expects the company's capital spending in 2016 to be lower than 2015, resulting in declining production volumes and reserves in 2016 as capital spending will fall below maintenance levels."</p>
<p><span>Ref: </span></p>
<p><a href="http://www.upi.com/Business_News/Energy-Industry/2015/10/06/Rating-for-Chesapeake-Energy-lowered/2861444127827/?spt=slh&or=1" target="_blank">http://www.upi.com/Business_News/Energy-Industry/2015/10/06/Rating-for-Chesapeake-Energy-lowered/2861444127827/?spt=slh&or=1</a></p> In PA XTO is trying to also g…tag:gohaynesvilleshale.com,2015-10-02:2117179:Comment:35447162015-10-02T16:05:17.653Ztchttps://gohaynesvilleshale.com/profile/tc
<p>In PA XTO is trying to also get a post-production fee case dismissed because they claim under PA law a "royalty" allows for "net-back method". I don't know exactly how this relates to these other cases, but it does show how the definition of one word can effect a lease and that 9 men/women in a Supreme Court will make the final decision on that definition.</p>
<p>XTO Energy filed a motion Sept. 21 to dismiss a lawsuit filed against it over how it calculates royalty payments. On July 14, the…</p>
<p>In PA XTO is trying to also get a post-production fee case dismissed because they claim under PA law a "royalty" allows for "net-back method". I don't know exactly how this relates to these other cases, but it does show how the definition of one word can effect a lease and that 9 men/women in a Supreme Court will make the final decision on that definition.</p>
<p>XTO Energy filed a motion Sept. 21 to dismiss a lawsuit filed against it over how it calculates royalty payments. On July 14, the Thiele family and Richard Marburger as a trustee of the Olive M. Marburger living trust, both Butler County landowners, filed a suit against XTO in federal court alleging insufficient payment of royalties. The complaint alleged that XTO had committed a breach of contract by deducting operating expenses from royalty payments to landowners. The suit was filed by Pittsburgh-based firm Jones, Gregg, Creehan and Gerace, which hoped to have it continue as a class-action suit. The plaintiffs would be any landowner who signed a mineral rights lease with Phillips Production before Phillips was acquired by Exxon Mobil in 2011. The leases stated that the landowners would receive one-eighth of the proceeds the company received for gas sales. In its motion to dismiss, the legal counsel for XTO wrote that the company did not commit a breach of contract by deducting post-production costs. The court papers cited a 2010 court ruling that supported XTO’s method of determining royalties. They cite legal precedent set by “Kilmer v. Elexco Land Services,” decided by Pennsylvania Supreme Court in 2010. In that decision, the Pennsylvania Supreme Court held that the term “royalty” when used in oil and gas industry leases permits a “net-back method” of calculating royalties. Under this method, “post production deductions may be taken from the value of the gas sold at the point of sale in order to obtain the value of the gas at the wellhead where it is produced,” according to the motion. Royalties are then calculated as a percentage of that net-back price. - See more at: <a href="http://www.thecranberryeagle.com/article/20150930/CRAN0101/709299802/-1/CRAN01#sthash.Q1sfIofz.dpuf" target="_blank">http://www.thecranberryeagle.com/article/20150930/CRAN0101/709299802/-1/CRAN01#sthash.Q1sfIofz.dpuf</a></p> failure to pay royalties owed…tag:gohaynesvilleshale.com,2015-09-23:2117179:Comment:35419782015-09-23T22:19:12.077ZSteve Phttps://gohaynesvilleshale.com/profile/StevePorter
<p>failure to pay royalties owed is not generally an insurable event. If it has underpaid lease royalties by 10% or more, and through some action it had to come up the cash to pay (all of us) back royalties since the start of production of the various shale plays around the country, one has to wonder if it could survive. Not sure a trip to Bankruptcy Court would help, since CHK might lose its leases if it didn't pay. Not sure how that would play out.</p>
<p>Settling for 50 cents on the…</p>
<p>failure to pay royalties owed is not generally an insurable event. If it has underpaid lease royalties by 10% or more, and through some action it had to come up the cash to pay (all of us) back royalties since the start of production of the various shale plays around the country, one has to wonder if it could survive. Not sure a trip to Bankruptcy Court would help, since CHK might lose its leases if it didn't pay. Not sure how that would play out.</p>
<p>Settling for 50 cents on the dollar, but getting a check now, might be a smart move.</p>
<p></p> Do these guys carry umbrella…tag:gohaynesvilleshale.com,2015-09-23:2117179:Comment:35417722015-09-23T19:13:23.562ZFrankshttps://gohaynesvilleshale.com/profile/dellb
<p> Do these guys carry umbrella or liability insurance to cover such suits? Just wonder if this really effects their balance sheets, (Robin Hood balance sheets, repo105?)?</p>
<p> Do these guys carry umbrella or liability insurance to cover such suits? Just wonder if this really effects their balance sheets, (Robin Hood balance sheets, repo105?)?</p> Thanks for the update. Feels…tag:gohaynesvilleshale.com,2015-09-17:2117179:Comment:35393282015-09-17T02:05:17.415ZJHHhttps://gohaynesvilleshale.com/profile/JackHodges
<p>Thanks for the update. Feels like the same thing is happening today... just a different player involved.</p>
<p>Thanks for the update. Feels like the same thing is happening today... just a different player involved.</p> I'd rather watch paint dry. …tag:gohaynesvilleshale.com,2015-09-17:2117179:Comment:35395822015-09-17T02:02:51.478ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>I'd rather watch paint dry. LOL!</p>
<p>I'd rather watch paint dry. LOL!</p> Here are my notes from the te…tag:gohaynesvilleshale.com,2015-09-16:2117179:Comment:35393202015-09-16T23:15:28.435ZHenryhttps://gohaynesvilleshale.com/profile/Henry48
<p>Here are my notes from the teleconference of 9/16/2015:</p>
<p>This is the final teleconference. If you want more info from now on, go to their web site.</p>
<p>So far, they have filed 400 lawsuits, representing 10,000 plaintiffs. They have another 10,000 plaintiffs signed up, who don't yet have lawsuits filed.</p>
<p>First trial is in Feb. 2016 -- only 6 months off.</p>
<p>That's it. Let's go watch the debate.</p>
<p>Here are my notes from the teleconference of 9/16/2015:</p>
<p>This is the final teleconference. If you want more info from now on, go to their web site.</p>
<p>So far, they have filed 400 lawsuits, representing 10,000 plaintiffs. They have another 10,000 plaintiffs signed up, who don't yet have lawsuits filed.</p>
<p>First trial is in Feb. 2016 -- only 6 months off.</p>
<p>That's it. Let's go watch the debate.</p> It's somewhat surprising that…tag:gohaynesvilleshale.com,2015-09-11:2117179:Comment:35377962015-09-11T20:26:12.902ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>It's somewhat surprising that they had to bring suit but then the industry as a whole supports more law firms than any other with which I am familiar. They are constantly in court.</p>
<p>It's somewhat surprising that they had to bring suit but then the industry as a whole supports more law firms than any other with which I am familiar. They are constantly in court.</p> Bass brothers likely knew thi…tag:gohaynesvilleshale.com,2015-09-11:2117179:Comment:35376472015-09-11T19:25:03.563ZMEhttps://gohaynesvilleshale.com/profile/East
<p>Bass brothers likely knew this, which would tend to speak for itself. </p>
<p>Bass brothers likely knew this, which would tend to speak for itself. </p> Less a trend then par for the…tag:gohaynesvilleshale.com,2015-09-11:2117179:Comment:35376922015-09-11T17:33:52.069ZSkip Peel - Mineral Consultanthttps://gohaynesvilleshale.com/profile/ilandman
<p>Less a trend then par for the course. Those plaintiffs with the ability to afford expert council and protracted litigation often end up settling. I followed a couple of such cases locally although not on a par with the Bass Brothers. For the record few are on par with the Bass Brothers. CHK and basically any energy company will tend to draw out the process and when finally faced with a court date they can't postpone make a settlement offer. No company wants to risk setting a legal…</p>
<p>Less a trend then par for the course. Those plaintiffs with the ability to afford expert council and protracted litigation often end up settling. I followed a couple of such cases locally although not on a par with the Bass Brothers. For the record few are on par with the Bass Brothers. CHK and basically any energy company will tend to draw out the process and when finally faced with a court date they can't postpone make a settlement offer. No company wants to risk setting a legal precedent and creating case law that could be used against them in the future. This is nothing new.</p>
<p>What is needed is a plaintiff with a compelling case that will decline to settle. That will pursue litigation to a verdict. If the Bass Brothers or any similarly situated plaintiff can accomplish their goal through a settlement, there is no need to continue to a verdict.</p>
<p></p>