Replies to This Discussion

Permalink Reply by Rick on October 20, 2008 at 8:57

CR, I didn't get the boot from Chesapeake but I want to let the folks that did get the boot know that backing out of leases isn't the only way CHK is hurting their credibility with land owners. I am in a section that has already been drilled and I can speak personally that they are more than willing to ignore and dance around the LA Mineral Law Codes.

In addition to your question, I would like to know how many land owners are in situations like mine, where they have proceeded with drilling activity in a section and completely left unleased land owners out of the process and have not attempted to contact them nor answer their emails or return phone calls to those unleased landowners. I think it is a shame that the state doesn't have a Dept that enforces the Mineral laws as they pertain to the individual landowner and the best advice you can get from the Parish or the State agencies is "We suggest you get an attorny".
That's fine, I will get an attorney, but that's kinda like the state passing laws and the local sheriff or city police being expected to enforce them but then when someone breaks into your property or violates those laws in some other way and you call the police, all they tell you is "We can't help you, those laws are just there for looks, you'll have to hire an attorney if you want anything done."

That kind of law making and code enforcing is one of the main reasons why these companies think they can come into our backyards and do whatever THEY decide to do, lie, deceive, back out of signed contracts, break leases, whatever; because they know they have friends in Baton Rouge that our tax dollars are paying but who's main objective is to protect the big O&G's. I encourage everyone to pay close attention to how it is handled at the state and parish level, I would be willing to wager my mineral rights that nothing is done to prevent these things now nor to keep them from happening again in the future.

Permalink Reply by CR on October 21, 2008 at 0:31

Rick, If everyone would stick together and tell CHK to take a hike and that we'll go unsigned, they would quickly change their tune. Although it's probably too late to do this seeing they already have over 700k acres leased. They will want the rest of it one day and that's when it'll be time to put the brakes on. They want what we have and we didn't ask them to come get it, they came to us. They sure have changed the attitude of many people on the Haynesville Shale.

Permalink Reply by Foxiecajun on October 21, 2008 at 1:57

Rick, before you hire the attorney, you may want to have a complete mineral history done. I dont work for CHK but I cant believe they would completely ignore you. They have to do a run sheet and get attorney title opinion when they drill. At that time they should take care of any overlooked, missed or problems with the mineral owners. I would think that they would not want to open thereselves up to a law suit. I have seen lots of those in DeSoto court house and none looked pretty for the O & G company. But on the other hand La is sometimes really hard to find the correct mineral owners. Since working here I have seen alot of people that think they own them when they really dont. I am working on a case right now from 1939 that they, believe they still own a part of the new drilling because of the production in 1940-1991 and new wells drilled in the middle holding there interest until today. So sometimes these things are really complicated. P S I am all with you and your opinion of CHK.

Permalink Reply by Grillin' - MmmMmm on October 21, 2008 at 2:10

Think I saw something on one of the other threads that said if a company drills a well in a unit, they "may" contact non-leased owners, but not necessarily "shall" contact them. Could also be wrong context so definetly get better advice.

If the law says "may", then they have the option of drilling the well, leaving you as an unleased mineral owner and then sending you the full information after the well is drilled. They are then obligated to send you that information and then quarterly reports on production, expenses, etc leading to the point where they have recouped their costs for your portion of the unit. Then after they have recouped, you then start to draw revenue (after monthly op costs) from the property. So it is possible that they are following the law. BUT all of this assumes they have formed a unit and you should have been notified of the unit hearing and confirmation by the State. Now, as someone else mentioned, it may be that their records don't show you as owning the minerals. That has happened before, as minerals can be severed from land in a bunch of ways. Keep an eye on the well, production, etc. and probably get something that verifies your title to the minerals. Maybe contact a competitor and tell them you might be interested in leasing and see if they will run the records for you.

Permalink Reply by Grillin' - MmmMmm on October 21, 2008 at 2:15

Knew I had seen this. It was in the thread "Decline Curves: Barnett vs Haynesville. Here is the post from "Rick". Notice is does say the the operating company MAY notify unleased mineral owners that they are drilling a well but it does not REQUIRE them to. It does REQUIRE them to supply all of the post drilling information, though.

"Reply by Rick 12 hours ago
KB, I know I'm preaching to the choir here, because you obviously have a great amount of knowledge on LA Mineral Codes but I wanted to mention the RS 30:103.1 specifies that Operators and producers are to report to owners of unleased oil and gas interests.

LA RS 30:10 says they "MAY" notify unleased owner in a unit, thus allowing them an option before the well is drilled which I can personally assure you, Chesapeake is not doing at this time.

Whereas, LA RS 30:103.1 says whenever there is drilling in a unit that includes land upon which the operator or producer has NO valid lease (like mine) said operator or producer SHALL issue reports to the owners of said interest by sworn, detailed, itemized statement;
1) Within 90 calender days from completion of well, an initial report which SHALL contain the costs of drilling, completing and equipping the unit well.
2) After establishment of production from the unit well, quarterly reports which shall contain the amount of oil, gas, or other hydrocarbons produced from the land in the previous quarter.
b) the price received from any purchaser of unit production.
c) quarterly operating costs and expenses
d) any additional funds expended to enhance or restore the production of the unit well.

And it goes on to explain more as you know, so they should be receiving my certified request for this information this week and I will find out how and what they will do after that."

Permalink Reply by KIM CASWELL on January 12, 2009 at 19:12

HI RICK JUST READ YOUR POST. I TOO AM UNLEASED NO OFFER OF A LEASE BUT CAUGHT A SURVEY CREW ON MY PROPERTY POSTING A ROW WITHOUT MY PERMISSION.

Permalink Reply by Grillin' - MmmMmm on October 21, 2008 at 5:58

thanks KB. I guess the saying is "if you don't have a lawyer, get one!!"

Permalink Reply by Rick on October 21, 2008 at 13:58

Thanks to all for the input on my situation. I have been to the DeSoto Court house 3 times and have tracked the land back into the late 1800's, the Nelson family, owners of the Nelson 18-H-1 originally owned the home place that I bought as part of their big land holdings. I found where my property changed hands only twice in all those years but no reservation of minerals. There was a lease back in the early 90's that resulted in a well as shown on Sonris well #215327; that well still shows a status of active but is NOT, it hasn't produced in several years and the neighbor that had the old well equipment made Greer Production remove it after the well was abandoned. I know the well did not hold the land in HBP because the other large land owners were able to lease their property and did so in 2005-2006 leasing to Stellios Exploration which I think either sold to or became Rising Star; either way, the lease was apparently flipped to Chesapeake and was due to run out on Aug. 28, 2008, which is why Chesapeake was quick to drill in this section to keep it from coming back up for the large amounts that were being offered.

When all the other land owners re-leased to Stellios, I was not leased and did not know anyone was leasing because not many landmen approached owners with 1.16 acres back then. I was approached by Chesapeake in April 2008 but only for $300.00 just before all this HS stuff broke loose. Then in August the same landman left a note with my neighbor with his number but no offer, about 10 days later, he left a note stuck in my door with his number and said he "might" have an offer I would like. I did not respond because he had lied to me when he offered the $300 and since he had my phone number and mailing address, I felt I deserved more than a note in the door and no offer. Another Chesapeake landman that worked Section 19 told me he had my land on his list but he was not authorized to work it and assured me his boss would get in touch with me, that was 5 weeks ago.

When tracing the land, I never found any mineral reservation on any conveyance and being the original home acreage, it stayed in the family until July 2001 when it was sold to the man I bought it from in 2003. It was exchanged once from mother to daughter and then back later but no mineral reservation. When it was sold in 2001 it was with all rights and when I bought it in 2003 it was with all rights. Even if the Ferguson well was holding it at one time, that production stopped almost 10 years ago and obviously didn't hold the section by production because all the other 630 something acres leased again to someone else. The land is registered in my name and CHK's attorneys sent me notice of application to force pool in May 2008; it is apparent that their attorneys and 2 of their land men realize the rights are mine. However, I never received notice from anyone as to whether they were granted to force pool and unitization request. They also did not exercise their option to send notice of their actions and information of my opportunity to participate as mentioned in LA RS 30:10.

I have sat here waiting thus far and I'm not in a big hurry now, they may be going to do as Mmmarkk said and honor Code RS 30:103.1 sometimes in the next 90-120 days but I know for a fact that they are not willing to answer my emails or return my phone calls. They will soon receive a certified letter letting them know that I am here I would appreciate them honoring applicable codes.

Foxiecajun, I think they sent the $300 dollar offer and when it was turned down they later ran their searches as the Nelson 18-H-1 was being drilled and each time the well approached a drilling milestone, they sent the landman back (he showed up the day of the Vertical TD and again while the horizontal was being drilled) but he never caught me at home and didn't try to contact me in any other way and never made another offer, unless "I think I have an offer you might like" counts as an official offer. But trying to stay true to the hurry'em up tactics, he told my neighbor to ask me to hurry cause he thought they might be going to drill around here soon at which time she showed him the rig derrick and he stumbled over a few words, acted embarrassed and left, man, what a PRO!

Permalink Reply by Henry on January 13, 2009 at 2:14

Chesapeake gave the boot to many members of Kassi's coalition. I'll lay out the story...

After completing all negotiations, and coming to agreement on everything, the members of Kassi's coalition signed an "Agreement to Lease" with Chesapeake. This document was written by Chesapeake, and its purpose was to hold all parties to the negotiated agreements while Chesapeake ran titles. The document claimed to be "legally binding" and the Chesapeake signature block was to be signed by Henry Hood, Chesapeake's Chief Legal Counsel, who is in Oklahoma. Chesapeake required that the landowners get the document notarized and witnessed. Each landowner signed the document and returned it to Continental Land Resources, the company representing Chesapeake. At this time, lease prices were still rising, so the document required coalition members to stop soliciting bids from other companies. As far as I know, all signees adhered to this contract.

For the next six weeks, Chesapeake worked to search mineral titles on the land. Some members of the coalition signed contracts and recieved payment. Others (like Kassi) were found to be HBP. Others were told that their land would be researched next, and to sit tight. Chesapeake collected social security numbers from all of these people, in anticipation of paying them. Chesapeake explicitly told Kassi that they intended to honor ALL of the agreements. The unpaid landowners continued not to solicit other offers.

Then, six weeks later, Chesapeake claimed that Mr. Hood never signed the document. (Oops!) Therefore, Chesapeake claimed there was never an agreement. This is not the case. The law is clear, that if the Lessee's words and actions are consistent with the contract, the contract is valid, even if never signed (See St. Romaine vs. Midas). This is not an HBP issue. It is not an issue of anyone not having clear title. It is just an issue of Chesapeake not wanting to pay.

Chesapeake knows small landowners cannot bear the expense of a lawsuit. So they get away with this stuff. Landowners need to be aware of Chesapeake's tactics. Landowners should be very careful if they have to deal with them in the future. Be skeptical, be suspicious. Make them sign the contract first, before you sign.

Permalink Reply by Henry on January 13, 2009 at 4:28

Let me add one more part of the story... At the time of the negotiations, all of the tracts of land were presented. In other words, Chesapeake had the opportunity to inspect every tract, and they agreed that they were interested in leasing each and every one of them. They did not reject a single one. There were no surprises in this deal for Chesapeake. They were given the legal descriptions of each and every tract long before any agreements were signed, and they explicitly said they were interested in every one.

Permalink Reply by Geoff on January 29, 2009 at 10:29

You think Chesapeake is bad, you should have to deal with the EOG Resource brokers in South Arkansas. They are offering to lease, stating "lease to us or we will sue you and make you lease". At least Chesapeake is nice to you until they get you signed up!!!