Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2013 at 2:46

Andrew, the lessons don't seem to have  been learned as much as you and I would hope.  GHS was active within 60 to 90 days of the public announcement of the Haynesville Shale Play.  Keith can supply the exact date for anyone interested.  The vast bulk of the leasing for the Haynesville occurred after that date.  The majority, many months afterward.  Those later leases generally exhibit the same lack of knowledge by mineral owners and failure to seek information and professional assistance.  Since the Haynesville there have been several new, emerging prospects, the Lower Smackover/Brown Dense and the Tuscaloosa Marine Shale being good examples discussed regularly on GHS, which lack any evidence of improved due diligence on the part of land/mineral owners.  Now there is another, literally in the backyard of many of our members, and I see the same mistakes and lack of due diligence.  IMO legislation is the only way to provide basic protections for private mineral rights.

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Permalink Reply by HBP on January 11, 2013 at 3:43

Agree with Skip, I've seen people for years now since the main Haynesville boom who kick the tires on professional services, but then go it alone on a lease or other issue.  It's not worth it when land and/or minerals are involved.  It may be self-serving for me to say that, but its also true. 

Then after the lease, an owner must look at the royalty income as a business - It is a blessing, but that doesn't mean you don't take a pencil to it or pay a professional to do the same.    

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Permalink Reply by Hopeful About Natural Gas on January 10, 2013 at 18:25

Andrew, you should cut this out and make it an article on the site and perhaps pass it around to other blogs.

You've got a lot of good, balanced info in here that many, many people would benefit from. It's also a rare, specialized subject that you've put into layman's language. It should be reprinted.

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Permalink Reply by Andrew on January 11, 2013 at 1:58

Hopeful, thank you for your kind feedback. I've added a blog post that reproduces my answers to Ken's questions. I will post a link to it on this thread once it is approved.

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Permalink Reply by Greedy Landowner on January 11, 2013 at 1:53

There is another angle besides the well head price that Chesapeake plays that most folks who are leased with them are probably unaware of.   I am unleased with these criminals and there is a "gathering charge" taken from your production.  We are talking about a charge that is sometimes 33% of total production.  

I have done the whole tough sounding send the certified mail to them activity and only got a phone call from a young lady in accounting.  She could not tell me the definition of "gathering".  She could not tell me what the charge was based on.  She could not tell me why the charge is different every month. She only said that her boss told her to call and tell me that this was a legal deduction.  I asked for her boss to call me which never happened.  Sent a follow up certified letter, never got a response.  

I don't work in the industry and I never got an explanation from Chesapeake but I assume that this is a charge for the cost associated with transporting the gas.  It costs 33% of production to let the gas make that whooshing sound going through the pipe?  Really?

They truly operate above the law in this state. 

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Permalink Reply by Henry on January 11, 2013 at 8:55

GLO,

I could be wrong here, but my understanding is CHK invested heavily in constructing their own gathering system when the Haynesville Shale began.  With the decline in gas prices, and the loss of rigs, the amount of gas going into their gathering system is likely not as much as they expected it to be.  Thus, they raise prices to make the venture profitable for them.  There are likely other, less-expensive gathering systems near you, but I'm guessing CHK won't use those.

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Permalink Reply by Jo Ann Carter on January 13, 2013 at 23:55

You know, without the comapanies we would not even have the royalties. I am thankful for them and the fact that they have helped our economy so much. Even though I am thankful, I do not feel as if they should just steal from us. I was hbp and my lease was sold to them. The company before CHK did not take out transportation fees and such. Because I had a Exbit in my contract that said I was to be paid at the well head. Well, guess what CHK will not honor that Exibit. They did honor the other exibit I had. Maybe we should insist it said in plain words "where it comes out of the ground I will get paid" I am sure they could find a new meaning for those words also. It is just so wrong.

Another intresting thing, if they are gonna take it from me, I think I should at least be able to deduct it as an expense on my income tax. Oh No, they want that too. When they pay me what they want to for the gas at the end, I feel that feel like they have double cheated me. I do not feel that I am being greedy either. I just want my fair share or what I originally agreed upon with the first company.

I wish a Nat"l newspaper would read this site. Ok, I just broke my resolution not to complain and just be thankful for what I do have. By the time I pay taxes I really wonder what will even be left.

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Permalink Reply by Henry on January 14, 2013 at 1:27

Jo Ann,

You don't need a national newspaper.  Why not contact the Shreveport Times?  This ought to make a great story for a reporter who wants to do some real investigative reporting.  Local papers can do a great service for their readers by digging into local issues like this.

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Permalink Reply by Larry G Smith P.E. on January 15, 2013 at 5:46

That may be true that CHK invested in a gathering system, but, that is a Capitol Investment for them and should not be charged to the royalty owners. IF we are charged for Capitol Investment then WE own part of this investment and should be notified about this by CHK. They get 75% of the minerals being produced that is to cover the expenses, operating as well as Capitol Expenes.

 

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Permalink Reply by Greedy Landowner on January 14, 2013 at 10:15

I dont think you can blame them for trying to exploit every loophole. It is sad but it is the standard of business today. I do think that it is wrong to continue to operate outside of a binding contract once the property owner notified the operator.

I have expressed this before, but my greatest disappointment has been with our elected representatives. They have done nothing to stand up for the very people who elected them. The two issued discussed in this topic have been discussed many, many times. None of them have made an attempt to remove the ambiguity from the language which allows the operator to engage in such theft. It speaks loudly as to how powerful the oil and gas lobby is in this state.

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Permalink Reply by Larry G Smith P.E. on January 15, 2013 at 5:40

Well Federal court may help, local courts are all bought and paid for in advance. To answer  your question about WHO, good luck on that they will not give you an answer. Then if they do it will not be a direct answer. Just like the money they take out of our checks, they have set up paper companies to cover their tracks. The one thing that you are correct in, is that they are not the most Honest people to do business with. Learning the hard way. But still looking for them to slip up, then they will get nailed and hard.

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