landowner

Has any individual participated in a HS well?

I have a few acres in a section that has been unitized. The minerals have not been leased. I am wondering if anyone has asked and been allowed to participate in a well.  The proportional cost of the well for my small acreage would not be a problem for me.  I was wondering if anyone had gone this route and what pitfalls could be avoided.  HK is the entity drilling the well.

 

I would expect to form an LLP/LLC to protect against some catastrophic event.

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Permalink Reply by Scott on June 24, 2011 at 5:10
They are absolutely the worst to deal with. I finally got fed up with them and sold my working interest which were all operated by Chesapeake. Personally, I think some of their land department staff in Louisiana were a joke.

Oil & Gas ProPermalink Reply by The_Baron on June 24, 2011 at 5:27
I think thats their goal, wear you down to the point you are just want out. I thought I was doing well when I found a good person in their joint intrest billing dept, until she got moved somewhere else...
Permalink Reply by Scott on June 24, 2011 at 5:53

Some of the things they tried to pull with me would not fly in Oklahoma with the Oklahoma Corporation Commission. I would pass on my dealing with my associates in Oklahoma and they couldn't believe how horrible CHK's Land Department was. They made a mistake on my decimal interest regarding all 9 wells that I was involved with.  Then it would take up to 6 months to correct the mistake and "retroactively" correct all the underpayments they had been issuing me up until that point which would take an addition 3 months.

 

In the end, I was definitely happy for what I sold it for but the headaches CHK caused were just ridiculous. Never again will I go in on a well with CHK in Louisiana.

Permalink Reply by Rocker on June 23, 2011 at 8:01
I am UMO and signed my division order on April 1st 2011.  The division order came with an attached list of all the property owners in our section.  It listed everyone's information acreage, % royalty ect...  Some of our neighbors who leased at 25% have received their checks already.  The UMO's in our neighborhood are not expecting to receive our checks until the well has paid for itself.   This time is unknown since it is all dependent on how good the well is producing.  We predict maybe 11 months from figuring how much it cost and how much it is producing now.  I am hopeful that CHK will pay its UMOs.  I will keep you posted. 

Oil & Gas ProPermalink Reply by rjjackson on June 23, 2011 at 9:34
You will get a good education for sure.

landownerPermalink Reply by Henry on June 23, 2011 at 12:26

There's no need to fear!  Underdog is here!

(You have to be old enough to remember the Saturday morning cartoon from the '60's...)


Oil & Gas ProPermalink Reply by Two Dogs, Pirate on June 23, 2011 at 14:22
Hey Henry, I have lived the life of a cartoon character.

Oil & Gas ProPermalink Reply by Joe Ring on June 28, 2011 at 9:32

Lease, don't participate!  They will rake you over the financial coals.  I beleive that state law in Louisiana allows the operator to recover 200% of drilling, completion and monthly expenses before a non-consenter comes into the revenue stream.

 

Go to the mail box and pick up a check every month and not an operating statement.  The 8/8THS Fever is a horrible disease.

 

J. J. Ring III

 


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on June 28, 2011 at 9:44
Joe, state mineral statutes have no risk penalty for the Unleased Mineral Owner.  The operator can only charge the UMO's production the actual and accepted well costs.  The risk penalty of 200% applies to nonparticipating Working Interests.  However I do agree with you that in only rare and specific circumstances should mineral owners choose to go non-consent.  A lease is the best decision for 99+% of mineral owners.

Oil & Gas ProPermalink Reply by Joe Ring on June 28, 2011 at 10:17

Skip:

 

Thanks for the one-up on the Unleased Mineral Owners in La.  Have done a lot of wells in Louisiana over the years and never had an Unleased Mineral Owner situation.  Damn lucky, I guess.

 

Best regards,

 

J. Ring

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