The decimal interest is correct on division order. How can you obtain itemized statement showing all details of NG price the operator received and all deductions taken out or if royalty free clause in lease are you getting gross price minus only taxes. Is operator required to give you this information on your written request? Is email considered written request? Is this a normal recommendation royalty owners should due? I have heard royalty department has been know to "accidently" make errors in calculations.
I have wondered the same thing. Today I received my first check from Chesapeake. The price for gas for the period in question is lower than the price I received from smaller operators drilling in the Hosston formation. It makes me a little uncomfortable when I read on the check stub this statement about Gross Value; "It may reflect the price received from an affiliated purchaser." Afiliated purchaser? Sounds like a conflict of interest. Thoughts anyone?
About a month ago I started a discussion where I said I would collect data on the price everyone receives for their gas, and try to make sense out of it. For example, did some operators consistently pay a higher price than others? How much of a difference did cost-free royalties make? Were there differences by region?
Well, no one offered up any data for me. Maybe you can spur people to offer up info on the price they are getting, and let's see if we can discern whether any operator stands out as paying less (or more) than others.
Henry--I read with interest on your thread and believe I replied I knew that prices were varible depending on broker and where gas was delivered to what location but as you tried to find out and now I am asking similar question --How can we verifiy if they are paying the royalty owners correctly? Henry you and I are looking for same thing in general I think so maybe some on our knowledgeable members will give us some insight to how can we be for sure about correct payment.
HENRY----LOOK AT MY LAST POST NEXT PAGE TELL ME WHAT YOU THINK__APPLY THRU KEITH AND START NEW GROUP --"WHAT PRICE NG DID YOU RECEIVE ON YOUR ROYALTIES"---MONTH-- UNIT --LOCATION-- OPERATORS NAME--TWO CATAGORY (1) ROYALTY FREE CLAUSE(2) NO ROYALTY FREE CLAUSE----maybe people will post their info for all to share. Then you can as you said put it on spread sheet and summarize for us to reveiw after peroid on time
If you don't trust the operator, you will need to send a request by cert. mail for the info you seek. If they fail to provide or you are not happy with what you get, your remedy would be in court.
That being said, in respose to JD's comment about his check from CHK.
"Today I received my first check from Chesapeake. The price for gas for the period in question is lower than the price I received from smaller operators drilling in the Hosston formation."
This is typical of CHK. remember, CHK is a large operator, and a pro at screwing theRI and WI. They typically sell their gas at lower prices. It is interesting to know that CHK does not directly market most of their gas, this is done by Chesapeake Energy Marketing, Inc. a wholly owned subsidiary of Chesapeake Energy.
The same goes for disputing drilling costs, CHK does not drill most of its wells, NOMAC, its wholly owned subsidary does..
Thanks-- Baron--There is one operator (small independent) I have heard watch out because they will take advantage of you and therefore leads to possible distrust by royalty owner. They demonstrated such when they put pipeline from well to transmission gathering line without sign ROW or paying for damages until we ask and still waiting on same. Yes lease gave them right of engress/ingress for pipeline but lease states Lessee would cover all damage to land,etc. So if I send cert mail letter what all should I ask for? These would not put me in a bad light with them would it or just good business.
Read the apposite provisions of the mineral code. email is NOT a written request.
These checks are cut via "software." God knows what's programmed in as "other" expenses.
Business is business. If you need to send a demand letter, do it and do it right and professionally.
Some good points, I would send certified mail olny.
Any direct deductions should be listed on the stub, but there is no telling what factors are determined in the price. For example, Operator A may be selling to marketer B. The price given by B may take into account any problems like low pressure, high CO2, other impurities, etc. So the price given to A may be substantially lower than the spot price...and there may be no deductions to be revealed, just a lower price received.
Baron---How can royalty owner ever be assured he is paid truly on what the operator said he was paid for gas and the BTU factor is correct plus deductions are correct $ amounts? If all ask on cretified demand letter for information will they give royalty owner copy of all payment invoices of all transactions or is this asking for too much? Other thoughts?
Thanks Baron for your answers. The bottom line is I don't think we can ever know for sure. Just like floor trader on NYSE they have to some degree a license to legally steal from public investors on market orders. Maybe if we sent demand letters for info they may be more cautions with us and not screw us outright by sending up red flags in their royalty department that this royalty owner pays attention to check stubs,etc going to court for the average royalty owner is too costly and they know it plus they have legal department to defend them and litigate it to death and cost little guy too much
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More