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Permalink Reply by kittycatmama on October 14, 2013 at 10:25

Isn't Larchmont the portion that Aubrey was given by CHK as part of his bonus

 

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Permalink Reply by jkw3 on October 21, 2013 at 9:20

Larchmont Resources, LLC is one of several entities Aubrey McClendon created to house his "Founder's Program" working interests which he was assigned by Chesapeake (other entities are Arcadia Resources, LP, Jamestown Resources, LLC and Pelican Energy, LLC) .  Assignments for these interests out of Chesapeake are recorded in the parish records.  Larchmont and the other entities are now managed separately from Chesapeake Energy.  WIth current relations  between Chesapeake and McClendon a bit strained, it makes no sense that Larchmont would apply for alternate unit wells on behalf of Chesapeake. The application will not be available on SONRIS until a hearing is set.

The last few alternate well plans Chesapeake has filed were all four well per unit plans.

 

 

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Permalink Reply by John L on November 2, 2013 at 10:07

I thought it was strange that Larchmont was applying for the alternate wells and CHK holds the lease. 

Today I received a letter from another law firm stating in a letter to the commissioner that Chesapeake operating, Inc. "intends to present evidence in opposition to the application by Larchmont Resources, LLC., and will seek an order denying that application". 

How could Larchmont even apply for the alternate wells if CHK holds the lease? It sounds like this could be a dirty mess. 

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Permalink Reply by 1kw6x71km1v37 on November 2, 2013 at 13:11

If a permit is denied CHK and Larchmont is declared operator, CHK must pay it's proportionate share of well costs within a specified time. If not, Larchmont can recover that amount from CHK's share of well proceeds plus that much again as sort of an encourager for leaseholders to pay their bills or take their dog out of the fight. I think it's still double, but this penalty may have been increased now to triple actual well costs. Double or triple, it's kind of a game killer. Hence, sometimes leases are dropped to escape the guillotine.

This isn't quite the same thing, but it shows how the game is played:http://www.reuters.com/article/2011/12/28/us-energy-giant-idUSTRE7B...

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Permalink Reply by John L on November 2, 2013 at 14:10

Where would this leave the royalty owner?  Would Larchmont assume the lease if CHK were to drop out or would we become UMI's?

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Permalink Reply by Joe Aldridge on November 2, 2013 at 14:22

cs,

Interesting article. Thanks!!!!!

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Permalink Reply by 1kw6x71km1v37 on November 3, 2013 at 7:53

John L,

Leased landowners would be left in a lurch for sure.

Someone else might come in and lease everybody up who got shafted, but I think more often than not  this happens once the prospect is found to be less prospective than previously thought. Or the lessee is just unable or reluctant to cough up the money. In any event, you would most likely remain unleased. The offending lessee escapes any and all obligations, of course, by simply dropping it's leases linked to the well or wells under consideration. It can be a dirty little business on the business end of things.

On the upside, in Louisiana anyway, the operator is now on the hook by statute to report and pay the unleased landowner for production above costs. And right there is where it starts to get sticky again.

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