Petrohawk & CHK taking expenses = about half the royalty
I just received an initial payment (after a year) for the Whitney 17H-1 well in DeSoto Parish (Section 17, Township 10N, Range 13W). CHK has the lease for the deep rights purchased from Pinnacle Operating in Shreveport but they had the well drilled/operated by Petrohawk. This was an old HBP lease so expenses were deductible but it looks like CHK is deducting expenses again after Petrohawk deducts expenses as the operator and the company who sells the gas, etc. As an example, the unit price for April 2012 was $.90 and for May 2012 it was $.94. It has increased to $1.63 for September 2012 which is the last month shown on the checkstub. What expenses would CHK have if HK is operating the well and selling the gas? Enlighten me please if anyone knows how this works as this is the first time I have seen this although others have certainly complained about some of the creative accounting that has been going on.
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Replies to This Discussion
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Permalink Reply by Hopeful About Natural Gas on -
Layla, do a search here for past blogs on this topic with Chesapeake or check out the CHK leased by section of the blog here. I've read about creative accounting here and some blogs are very detailed.
(good luck (if you find what you need in another blog please delete this one just for our housekeeping)
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Permalink Reply by 2p6y7ycljui0u on
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Our housekeeping? LOL!! King of the blog, or self appointed Nanny? Maybe more than that?
Hopeful About Chesapeake? HANG or HAC(k)?
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Permalink Reply by Robert L Call on -
What does the lease say about deductions from the lessor's royalty?
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Permalink Reply by mickiebyrd on
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Chk are just thieves and have multiple suits against them, they are gonna stick it to us until we get a class action against them or something, don't know why governing bodies can not step in and help???
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Could it be that it is all scripted from top to bottom? Governing bodies only govern if it is in the script handed to them by the very people you are hoping to litigate against. Living in America, that is life as we know it. Talk it over with the go to person Chk provides for the unhappy campers. It could be cheaper than a visit to a lawyer, and more productive.
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Permalink Reply by RONNY on
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Layla,
You can try sending certified letters to Chesapeake to let them know you are being double dipped on expenses. Be sure to include as much info as possible including your owner number. But be forewarned Chesapeake is screwing almost all their royalty owners who do not have deep enough pockets to sue them. I for one wish they'd get bought out by someone more honest. JMO
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Permalink Reply by HBP on
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Just taking the Sept price you quoted:
I could see CHK showing a $1.63 for production month Sept/12 if they are netting back the costs and then reporting Owner's final realized price. If they then take deducts from the $1.63 on that same check, that is double dipping (and please post if they are doing this), but if they pay you based on the 1.63 and thats it then the only issue seems to be that they are not reporting the deducts they are using to net back to the wellhead price. It is common for CHK to report price to owners after they netted out costs and it is why their price appears so low at times.
This is general problem that has been discussed here before and IMHO any deductions taken from the price sold should be reported to the owner on each stub, but if you read La. Rev. Stat. 31:212.31 (A) and (B), does it go as far as requiring that the costs such as gathering or compression, etc... be reported?? I've seen it argued both ways. But it is more of a problem when you have a no cost lease and they do this because your royalty seemingly has no costs, but the costs were already netted out.
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Permalink Reply by Two Dogs, Pirate on
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Layla why would you implicate Petrohawk in this deal? You name Petrohawk first out before Chesapeake in this post when it looks perfecly clear where the screwing is coming from. Why try to taint the name of one of the most honest operators out there (Petrohawk). I tend to wonder about the motive of this post, could it be something like sprinkling purfume on a turd.
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Permalink Reply by Lerret on
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Why try to taint the name of one of the most honest operators out there (Petrohawk).
Are you trying to be funny? Petrohawk ? Honest? I mean just being better than Chesapeake is a pretty low bar and our experience in Arkansas was not all roses.
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Permalink Reply by Two Dogs, Pirate on
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Lerret, I am not trying to to be funny. Do you work for Chesapeake?
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Permalink Reply by Katie McCullin on
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Hi, Layla - I work for Chesapeake and would be happy to connect you with someone to explain payments or answer any other questions. If you're interested, message me your contact information and royalty owner number. Thanks!
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