landowner

Dispute with Chesapeak on acerage in Division Order

Has anyone else had issue with the Division Order presented by Chesapeake declaring incorrect (under) acreage? Have spent one month so far trying to get them to correct their error with no success. I suspect there may be others with a similar issue and am seeking advice on how to get the issue resolved.
(This topic is also listed under the Desoto Parish discussion)


Regards,
Gary

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landownerPermalink Reply by Gary on October 14, 2010 at 4:45
I spoke to Lori at CHK yesterday, who informed me they will begin including additional detail on the payment stubs (expected to show on next payment) that will provide additional information relating to the price. Hopefully this will help to illuminate the subject.

I have heard from others that they may be selling to their subsidiary, which concerns me if this is true.

Regards,
Gary

landownerPermalink Reply by JD on October 14, 2010 at 8:25
That is quite refreshing to hear. Maybe the CHK people have paid attention to GHS. The more information they provide on the check stub the better.

Oil & Gas ProPermalink Reply by Dion Warr, CPL on October 13, 2010 at 10:27
Group:

Since this thread has acquired some new life in recent days, and I wanted to second the support that many on this site have given to Skip over these many months in doing his best to educate the landowner and mineral owner, I wanted to do so again here and now.

To reiterate his point, it is easy for laymen to suspect less than ethical intent on the behalf of the industry. In many cases, the differences (such as the ones on point here, being unit decimal (royalty) interests) are in many cases unintentional, and most operators will correct their mistakes when a lessor provides sufficient evidence. It also helps for one to find 'the right person' to assist with such problems; from all indications, Ms. McCullin is one of those individuals who takes great pride in not only being accessible and responsive to CHK owners' issues, but more than willing to put them in touch with a key person in the company to quickly resolve issues. This type of goodwill can go many miles in the minds of many owners when contemplating entering into future dealings with a company, and cannot be easily discounted.

In the interest of disclosure and providing good information (even if I can't claim complete impartiality), company personnel being skeptical as to discrepancies being made in the preparation of a unit survey, division order, or mineral ownership is standard business practice that can and in many cases does go on until challenged by a lessor. At the drilling and pre-production phases, companies spend an extraordinary amount of time, effort, and money to account for the full and complete ownership (mineral, leasehold, and royalty title) of every tract in every unit in which the company operates, with all burdens to which being accounted for. To accomplish this, companies utilize armies of abstractors and landmen, firms full of title attorneys, crews full of surveyors, and departments full of division order analysts. The best of these professionals strive everyday to get everything right, strive not to make a single error, and be resolute in the fact that they know their craft, or discipline, or profession, and are willing to stand by their work.

That being said, all of these people being human - each and everyone of them can make a mistake, or where such personnel are afforded professional discretion, can despite their best efforts, make a wrong call. Everyone (most everyone) in the chain know this, but the system is designed to safeguard against such petty human failings, and as such, the first response to the challenge of an error or discrepancy is one of skepticism; the greater the scope of the error, the greater the doubts to the validity of the challenge. Even so, mistakes do happen.

Skip's earlier advice to owners is both significant and wise:

Patience - to those who think that 'the company should know what I own': they should, in fact they believe that they do, with a great degree of certainty. Keep in mind as you speak with company personnel that in many cases, they know what they know, and that may be all they know. Give them the chance to tell you that. Royalty owner hotline personnel may only know you as an owner, a social security number, an owner in a unit (or units), and a royalty decimal. They may not have access to the volumes of paper generated on your behalf (abstracts, title opinions, survey plats, curative, etc.) or the experience or qualifications to answer your question, and no amount of verbal abuse or sarcastic incredulity will change that. They may however, be able to refer you to the right person (or people) to help solve your issue, and gratuitous abuse and scorn certainly will not motivate them to do so, even if professionalism should dictate it. Think about it: how helpful would you be if someone just called you a thief and a liar or a complete idiot?

Personal Education - no one expects you to go to law school, but learn about what is available to you, and what the company may need from you to help you solve your problem. It may be as simple as providing an address, a social security number, or a death certificate. That extra education may take nothing more than consulting this forum. It make take some listening on your part (and patience, see above). It may result in you learning that you need outside assistance to help to solve your problem.

Professional assistance - Sometimes having your own expert is the best means to accomplishing a goal or resolving a dispute. That doesn't necessarily mean getting a lawyer and paying him piles of money to sue everybody. For instance, I understand how most of the systems in my car operate, but I still go to my trusted mechanic with all but the most basic issues. He knows everything I know, everything I know that I don't know, and lots of things that I don't even know enough to think about. Per my most recent conversation with my mechanic, "I can tell you what it's doing, and could probably figure out pretty well why it's doing it, but by the time I find out what's wrong and how I might go about fixing it, you could've had it done six times over." On rare occasions, he may end up telling me that I need to go to a diffferent shop to have the work performed that I need done. A landman like Skip might be able to help you with many owner-related issues, but he can't open a succession on your behalf; he doesn't practice law.

Kudos to Skip, Katie M, Baron, Les B, Jay (please insert your name here if you know it applies; this is not a complete list)and all of you who work and take the time to assist, educate, and counsel those who need help in solving owner-related problems and comprehending complex concepts and issues on a regular basis here at GHS.
Permalink Reply by Linda Whatley on October 13, 2010 at 13:41
Great advice...... thanks Dion.

landownerPermalink Reply by Jack Blake on October 14, 2010 at 15:31
Many of the experts have helped Jack make much MUCH MUCH MUCH MUCH better decisions with my O & G dealings that I would have made without GHS (and made prior to joining GHS.)
You have done the same for many others as well. Also Jack Blake must say hats off to Keith Mauck for creating GHS!!!!!!!!
GO Haynesville Shale rocks howled jack Blake!!!!!!!!!!

landownerPermalink Reply by benny688 on October 23, 2010 at 15:09
GPS devices have turned up a lot of discrepancies from the old stick and transit days. My experience has been that if the land is uneven or hilly you will pick up acres- about 2%. If it is flat you may lose an equal or more amount.

The only solution seems to be having it resurveyed with modern devices although this takes a long time and delays everthing.

glta

landownerPermalink Reply by Mac Davis on October 24, 2010 at 18:43
It seems that old surveys often have greater legal weight than geometry and measurements. The deed may say "NW 1/4 of section 12" or some such, but if someone surveyed the land in 1920 and located the boundary line 20 feet off the mathematical location, the incorrect location may be the "legal" definition of the property.

Lots of the official section lines are in the wrong place, too.

I know in the old days, surveyors spent a lot of time finding old survey markers, landmarks, and fence lines. Is there any kind of transition going on to make the official legal property descriptions based on more modern systems such as lat/long instead of being based on finding old survey markers?

I wonder how discrepancies between math and survey markers get resolved for mineral rights. If your deed is for a quarter section, but the historical fence lines are off by 1 acre, do you lose an acre of mineral rights? What if the legal property descriptions for a section add up to more than the actual acreage in the section due to "round off" errors?
Permalink Reply by Phillip Marsala on August 25, 2011 at 3:20

I have the same issue currently with my DO from Chesapeake.  They stated on the DO for Section 7 as having a Unit Acres of 640.00000000 and a BPO Net Ac of 4.20800000.  My brother lives next door to me and leased through PetroHawk.  His DO clearly states that Section 7 is 565.11 acres and his property is 5.26 which is the same acreage that was listed on our property deed when we bought the place.  Chesapeake is diffenantly making up the rules as they go along and the State of Louisiana is turning there head and allowing them to continue to drill.  I asked my 10 year old, "if I take something from someone without paying for it, then what is this called and what should happen to me",  He replied, "that is stealing and you would go to jail for stealing".  Thank you.


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 25, 2011 at 3:24
Phillip, if you care to have any input from members on the correct acreage for your Section 7 they will need to know the township and range also.
Permalink Reply by Phillip Marsala on August 25, 2011 at 3:38
Thank you Skip.  The Legal Description is T16N-R13W-Section 7.  The well operator is PetroHawk Energy.  The well name is Tensas Selta Exploration Company, LLC 7-1.  I have another question.  Chesapeake also stated that PXP bought out 20% intrest of some of the leases and that Chesapeake will be only responsible for sending me 80% of my royalty payment, while PXP will be responsible for sending me 20% of my royalty payment.  Is this legal?  What a nightmare!  I did not sign a lease agreement with PXP, I don't evey have any contact information for them and have not received a DO from them yet.  Well was put on line in Oct 2010. 

Oil & Gas ProPermalink Reply by The_Baron on August 25, 2011 at 3:45

CHK would have assigned a 20% interest in your lease. The terms of theassignment may have required that Plains send you their share of royalties owed directly.

 

If you need information on this assignment, send a lettor to your lessor and request it. They are ultimatly responsible to you anyways.


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 25, 2011 at 3:47
You're  welcome, Phillip.  While we wait for The Baron to give us the correct acres for S7-16N-13W, I'll address your other question.  Both Chesapeake and PXP (Plains Exploration) are Working Interests in Petrohawk's Tensas Delta Exploration 7-1.  Chesapeake sold an interest in all their leases at the time to PXP in the early days of the Haynesville Play.  Working Interests may choose to pay their lessors or have the operator make the royalty payments.  Chesapeake and PXP have chosen to make their own, proportional share payments.  Yes, it is legal.  And not unusual.  A very large number of Haynesville Units have multiple lessees whose leases were Force Pooled. 

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