Why the H*#4@ did I sign a mineral lease?
Being part of a 640 unit is crap for the folks with small acreage. Its all a pyramid scheme. We all joined in this thing together to make money together...at least that's what the feeling WAS. I remember when the first checks were given out, many Shreveport natives boosted the economy for this area by shopping for big ticket items like cars, houses, etc. in hopes of getting more and better checks. But what did Chesapeake do? Send out Div Orders with stupid decimal points in the writings, such as .00003 for example. A lease in the beginning stated that the mineral owners would receive 25% of monies made. The Div Order to be signed states different rhetoric with that decimal crap. When I asked Chesapeake where did they get those numbers from, they answered me back with, "It's something we made up." Mineral owners are treated like the enemy. What if Walmart was in this situation? They own the merchandise, but the only folks who make the real money are everyone except Walmart, (except mineral owners). Doesn't make sense. Try doing the math with screwed up numbers such as .0003 and see what you come up with. A bunch of zeros after a decimal point adds up to horrific under payments made to the mineral owner, the ones who own the product. And where are the guys in my 640 unit who own tons of acres and made nearly a million dollars? would be nice if they shared their profits with us guys making 80 dollars to 500 dollars a year. I signed up because I knew it would benefit those with small acreage as well as those who own large acreage. My neighbors are in shock and most folks are embarrassed that their checks aren't more lucrative after receiving their initial payments of thousands of dollars, now we all get hardly anything. So much for boosting the economy for Shreveport.
Tags: 640, chesapeake, division, law, mineral, order, owners, payments, pyramid, rights, More…
Views: 8932
Replies to This Discussion
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Permalink Reply by Spring Branch,mineral owner on
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Bobbi, I seem to remember that he shares the minerals with two other persons so it may actually be 1/3 of .4 acre!
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Permalink Reply by Bobi Carr ("parker") on
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.0015625 / 3 = .0005208333
What decimal interest does your check stub say you own?
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Permalink Reply by Gale on
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Thank you Kathy! Companies have been doing the same as WalMart for years. I use to like to say I lived in "Compaq Country" all three founders of the company lived in my neighborhood. That was until I started hearing about how they workered temporary employees one day short of having to hire them and give them benefits. How sad for all those families. But as Kathy said that's what makes our country great is the opportunity to move on to bigger and better prospects. Big Oil Companies are not different than any other company. Sorry to hear Cheasepeake didn't come through Kathy, maybe better things are down the road for you and your family.
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Permalink Reply by Max on
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Hey, this is a good one..... let's see how deep it can get.
Lee, what would your check look like if you were in a 1280 unit?
and..... your idea of equal division;
Say you had a well in your unit producing a royalty payment of $1000 each day after all the cost deductions. That would be around $30,000 each month. And then say you owned 639.5 acres of that unit and your ex-brother-in-law owned the other .5 acre of the unit. Your check in the mail box would be around $29,993 dollars and your ex-brother-in-law's check would be $7 dollars. But.... let's be fair. You would cash your check and then hand over $14,993 dollars each month to your ex-brother-in-law.
Wonder what he would buy with that kind of money coming in every month?
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Permalink Reply by Dion Warr, CPL on -
Group:
Lee is already talking about sharing the wealth. If y'all keep knocking him like this, he's going to start posting youtubes of him lighting his tapwater on fire and cows dying in the sinkholes in the front yard. Can we extend him an olive basket and educate him please?
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Permalink Reply by Max on
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Educating someone starts with that person wanting to be educated. Lee hasn't asked for that and I don't think he will.
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Permalink Reply by lee on
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You know, Max(minimum), all along I have mentioned, show me the money, the math everyone has shown to us never shows the money made from a well. Until the gas guys show this in a truthful manner, all the math equations don't mean jack. I plan to work at Wallstreet. That way I can make up a scheme and rake in the big bucks not because I own minerals, but because I have the gift of gab and can make up goofy equations that equate to nothing. lol...math equations without showing the money to make the equation work is fruitless.
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Permalink Reply by Aubrey C. Sanders, Jr. on
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Lee, are you aware that you can go on Sonris and find out how much product the operator produced and sold from wells in any given month? As an operator I have to report all production and sales from each well every month. Failure to do so can result in fines and revocation of operators permit.
If you would post just one statement I am sure this question can easily be resolved. I would like to see all operators use one format to show land owner information as to amount of product sold and price received. All operators that I deal with do this. I have always assumed that this was required by law. Why don't you trot on over to Office of Conservation and see if they can help. Seems no one of us can explain it to you.
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Permalink Reply by Geologist on
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Lee,
I believe (I don't receive royalty checks but I have seen them before) that the price per barrel/mcf is shown on the check. You can also call the oil/gas company and find out for sure. Also, if you know the purchaser (buyer of the hydrocarbon) then you call them and possibly find out. The price of oil/gas depends on many things. You can't simply turn on the TV/look at the internet and know what your specific product will sell for. There are different indexes, different types of the same product (richness) and a host of other things. You may hear gas is going for $X but your's is actually going for $Y due to many things.
You need to understand this:
There are so many governmental agencies (state, local, federal) involved in oversight of the O&G industry that if someone tried to "cheat" you out of anything it would quickly be found out.
In addition, your perception of the O&G industry is wrong for 99.9% of the people involved. This is one of the few industries which allow anyone from any background to succeed and prosper. I have met people with 8th grade educations who are millionaires. This industry depends a lot on relationships and trust. If a person or company were doing dishonest or unethical things it would quickly be found out and impact those involved negatively.
O&G companies are hard to deal with in some cases. It is also extremely difficult to explain things to people who are convinced they have been taken advantage of and refuse to listen to explanations. This industry is unique in the fact that few people truly understand all that is involved in getting the product out of the ground and into general use. It isn't just a matter of getting it out of the ground and someone magically pays money for it. The price paid is also not a cut and dry number. Companies hedge, product is not rich, product is rich, etc.
A very telling example:
If a well is drilled and a partial mineral owner can't be found then the royalties are put in suspense. Upon successful proof that you are a mineral owner then any minerals you own are paid for by the company. This can be after 5 years or 25 years for that matter. I know of a man who was deeded minerals and had no clue. Someone found him and he was given a check for 3 million dollars by the O&G company. He began receiving royalty payments the next month.
In conclusion:
It seems that you are upset by the fact you signed a lease and haven't received the money you thought you would. That is unfortunate but happens a lot. When you sign a lease at $14/MCF and the price drops to $2/MCF you will start receiving significantly lower checks. This issue you speak of can easily be rectified by selling your mineral rights to a royalty company. Noble Royalties (in no way a recommendation and no, I don't work for them nor have I ever) comes to mind. They will evaluate your mineral rights/lease and give you a price based on their findings. It would give you a lump sum of cash and allow you to sleep at night which is not happening now it seems.
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Permalink Reply by Dion Warr, CPL on
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Deedee:
I was thinking Oceans 13 (tongue in cheek) vs. the proverbial olive-based offering, but at this point I'd be fine with an offering of a fruit basket, an olive branch or a number 10 can of cling peaches so as to not feel a sense of vague irritation at being five years into this and still having folks openly lament and not understand the basics of leasing and units, given the amount of coverage that this has been given on GHS over all this time.
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