Why the H*#4@ did I sign a mineral lease?
Being part of a 640 unit is crap for the folks with small acreage. Its all a pyramid scheme. We all joined in this thing together to make money together...at least that's what the feeling WAS. I remember when the first checks were given out, many Shreveport natives boosted the economy for this area by shopping for big ticket items like cars, houses, etc. in hopes of getting more and better checks. But what did Chesapeake do? Send out Div Orders with stupid decimal points in the writings, such as .00003 for example. A lease in the beginning stated that the mineral owners would receive 25% of monies made. The Div Order to be signed states different rhetoric with that decimal crap. When I asked Chesapeake where did they get those numbers from, they answered me back with, "It's something we made up." Mineral owners are treated like the enemy. What if Walmart was in this situation? They own the merchandise, but the only folks who make the real money are everyone except Walmart, (except mineral owners). Doesn't make sense. Try doing the math with screwed up numbers such as .0003 and see what you come up with. A bunch of zeros after a decimal point adds up to horrific under payments made to the mineral owner, the ones who own the product. And where are the guys in my 640 unit who own tons of acres and made nearly a million dollars? would be nice if they shared their profits with us guys making 80 dollars to 500 dollars a year. I signed up because I knew it would benefit those with small acreage as well as those who own large acreage. My neighbors are in shock and most folks are embarrassed that their checks aren't more lucrative after receiving their initial payments of thousands of dollars, now we all get hardly anything. So much for boosting the economy for Shreveport.
Tags: 640, chesapeake, division, law, mineral, order, owners, payments, pyramid, rights, More…
Views: 8936
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
Every lessor in a producing unit has a decimal participation number based on their proportional share of the unit acres and their royalty interest. And yes those numbers are small decimal fractions especially so for small acreage interests. For a mineral lessor with a 4 acre interest in a 640 acre unit and a quarter royalty, it would look like this. 4/640 = 0.0062 x 0.25 = 0.0015. There is nothing sinister or manipulative in calculating decimal participation interest, It is the same for every operator in every unit in every play. The math is actually quite simple.
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Permalink Reply by lee on
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That's nice and all, but how about showing us the money amount made per month. This calculation is bogus without showing me the money. I don't see a dollar sign up there. What happens to that same formula if you showed a dollar amount that a well pumped out, with a little division of course.
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Permalink Reply by Geologist on
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0.0015 * ($2.00 *32000 MCF) = 96
Translation: if a well made 32,000 MCF a month and the company sold it for $2.00 an MCF then the royalty check would be $96.
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Permalink Reply by ELLIS HUGH on
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Not sure if this is meant to be satire, but I found it humorous (haha, I think).....
Sectional units (640) benefit the owners of the smaller tracts in a section, otherwise they would likely be left out all together if the production was lease-based.
If you're serious that larger mineral owners should share their minerals with smaller owners, I fear you're preaching to wrong crowd. Most here tend to be fiscal conservatives.
I wish you well with your minerals.
EH, a bit confused
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Permalink Reply by Checkmateking on
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This can't be serious! I have to ask Lee, say you and I were the only leaseholders in a 640 acre unit, you owned 540 acres and I owned 100 acres, how would you divide up the royalty checks?
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Permalink Reply by Two Dogs, Pirate on
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Good to see you back Check.
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Permalink Reply by lee on
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Hey all. I am a man of honor and have served my country in the Navy. I look at my fellow countryman and only want the best for them. 540? Come on now. Our leases led us to believe we were going in at 25%, not the crazy decimal system given to us after the fact. Plus, paychecks are not getting to us all on a monthly basis as was preached to us in order for everyone to sign. But you know what? If we were to go in at 540 at 25% and the gas guys made 700 thousand dollars, I would be a happy camper. But this is not the case. We are talking some out of no where decimals based on the gas companies under payment formula that only works for the gas companies, not from a government regulated formula that works for the owner of the gas gold mines. Shucks, an ounce of gold could get me more money than this shale stuff. Speaking of which, all the other minerals besides the gas is being siphoned but unaccounted for. I'm sure somebody's running off with the loot, it aint us land owners. Oh, and I would split it 50/50 with you because we were in this thing from start to finish as a team of neighbors in a tract of land pushing to be signed on with the gas company. Seriously.
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Permalink Reply by Greedy Landowner on
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Can you post your decimal plus how many acres you own? I bet someone here can help decipher it for you.
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Permalink Reply by lee on
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.4 acres, for example, got me over 6 thousand dollars after signing. Later on, Div Orders came in at .0003 for example. 1 Paycheck was only around 300 dollars. Now this is all shared between 3 family members. Then lesser and lesser each pay period. The kick pow boogie mobile I owned when I started mineral leasing is the same kick pow boogie mobile I can only afford since signing. Its a shame because the only guys making real money are employees and CEOs of the gas companies. Not the ones who actually help them live extremely comfortable because of our gas gold mines. My acreage basically only pays like 7 dollars a month. Cool, if I didn't need to eat in order to survive.
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Permalink Reply by Spring Branch,mineral owner on
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This site is largely for educational purposes. Unfortunately, it didn't help everyone. Trust me, you were very lucky to have leased the .4 (or less) acre when you did. If you tried to lease it today, you might get a couple hundred bucks.
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Permalink Reply by lee on
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Not lucky, just stepped on during the undercut. The gas company's version of the uppercut in boxing, with a little bit of rope a dope. In another few years our land will have sink hole problems, that's why we all should be paid more because of us sacrificing our neighborhoods for that alone.
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Permalink Reply by Two Dogs, Pirate on
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Where are the sink holes going to come from?
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