Replies to This Discussion

Permalink Reply by Greedy Landowner on February 18, 2013 at 9:28

No. It only has to go to the operator. Good luck and let us know how the process goes!

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Permalink Reply by Teri Graves on February 18, 2013 at 11:41

Will do. Thank you!

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Permalink Reply by adubu on February 18, 2013 at 16:09

If you have enough mineral acres and it is in a good unit of production I would have a good oil & gas attorney with  Litigation experience follow up

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Permalink Reply by Teri Graves on February 18, 2013 at 23:54

Yes, I have considered it. We have 3.42 acres in a good producing unit. Our neighbor has 75 acres in same section. Of course they leased and have been drawing royalties for a while. Wouldn't it be wise to use the same attorneys that are familiar with that well?

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Permalink Reply by adubu on February 19, 2013 at 1:10

With only 3.42a why did you not agree to lease originally? Due to expensive of attorney would see want information you can obtain by yourself. Do you have total number of acres in unit to calculate what your decimal ownership would be? If your neighbor will share monthly and total production from his records then you can calculate what your revenue totals to apply to cost to estimate if well would ever pay out based on present Nat gas prices. You should also ask if they would go ahead and write you a lease and if so how much back royalty you will receive.

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Permalink Reply by Teri Graves on February 19, 2013 at 3:31

We were offered a lease but my husband didn't want to lease. He was advised with such a small interest the pay out is better not to lease.  16/16, 1/2 of 1% of 1 section is our interest.  From what we have researched the well is nearing paying for itself if it hasn't already.  We have recently been getting offers to sell our mineral rights.  That is what prompted us to check on the status of the well.  As far as the attorney goes, we hope there's no need for one but anticipate there may be.

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Permalink Reply by Henry on February 19, 2013 at 1:40

Teri,

Here's my two-cents.  It is entirely possible that CHK will not offer you a lease.  If the well has not reached payout, or is not going to reach payout, there is little incentive for them to offer to lease you.  Others on this site, who are in a situation similar to yours, have found that CHK will not offer a lease in these circumstances.  They don't have to lease you, and there is nothing you can do about it.

The law that governs how to deal the unleased mineral owner in Louisiana is quite generous in my opinion.  However, it was written under the assumption that companies would be drilling wells that actually make money.  With today's low gas prices, many wells are never going to be profitable.  Thus, many UMOs will never see payout.  So there is no incentive for CHK to offer you a lease, much less offer you a lease that pays royalties back to first production.

No amount of lawyering can make them lease you -- the law does not obligate them to do so.  I suspect if the well has actually reached payout, they will pay you according to the law.  Or they may offer you a lease for future production.  

We have a member on this site who is unleased, and whose well has reached payout, and he does get paid by CHK.  So they do pay, when the well reaches payout.

I realize this is not very satisfying.  But this is my two cents of opinion.

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Permalink Reply by adubu on February 19, 2013 at 2:24

Teri---what Henry stated in above post is most likely the facts in a nut shell and you may have no choice except ride the wave of being a ULMO and hope CHK will give accountability of the well and any future addition drilling in unit. Have you had any prior communication with CHK

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Permalink Reply by Teri Graves on February 19, 2013 at 3:58

The only communication with CHK as to date was the initial lease offer.  There is suppose to be drilling in Section 29 which we are in also.  There is no well in Section 29 because a substantial part of that acreage is currently the subject of litigation disputing ownership of both the minerals and the leases. The Louisiana Supreme Court is hearing oral arguments in this case on March 18, and final resolution might be years away still. That section likely won't get drilled until that litigation is concluded.

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Permalink Reply by Teri Graves on February 19, 2013 at 3:34

Thank you for your input. Sounds like I am on the same page as you. If all goes like it should we will get paid.

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Permalink Reply by Teri Graves on February 19, 2013 at 4:18

Thank you for your 2 cents.  I'm learning more everyday.  This well has been in production since  10-16-09. It is actively producing.  We hope to see a payout.  I realize it was risky not leasing and will not have the opportunity to do so on this well.  And will regret it if we never see a payout.  It's been a learning experience.  You did actually tell me something that is satisfying and promising. We have a member on this site who is unleased and whose well has reached payout and does get paid by CHK.  I'm going with that line of thinking!  Thanks again.      

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Permalink Reply by Greedy Landowner on February 19, 2013 at 2:55

Several years ago there was a very kind lady who gave a basic orientation to the mineral code as it relates to umo. It used to be available by searching "umo basics". She did an excellent job of explaining it in lay terms. I would encourage you to read it if it is still available.

If you do own the minerals as you believe that you do and the property is actually in the section that you believe it to be, then you have pretty much done all of the work already by sending the letter. Per the mineral code, there is a specified time span that they have to respond in. I remember that I got a response on the very last day possible to remain within the law. They arent going to go out of their way to help and it isn't rational to think they should becauase they aren't making any money off of you.....at least in principle!

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