Sunday's Express News had a paid advertisement directed at royalty owners who feel underpaid by Chesapeake. My question is how does a royalty owner determine if indeed they are being underpaid? We all know the price of a barrel of oil is down on both the WTI and Brent http://www.bloomberg.com/energy so it follows royalties will not be as much as 2008, 2009, or 2010 when it was as much as $114 per barrel.
The advertisement was paid by attorney John Petry (among others) a well- known Dimmit County attorney who will be holding a Town Hall Meeting in Carrizo Springs on Sept. 12, 2016, and another meeting in Cotulla the following day. From this advertisement, I am assuming Dimmit and La Salle royalty owners are feeling underpaid.
However, as an owner I am confused because monthly reports available on the TRRC website give detail account as to monthly production and disposition. I guess/estimate the price of a barrel of oil during that month and calculate royalties. Usually I am only a few hundred dollars off the actual check sent by Chesapeake.
So, again, how do I determine if all these figures are correct and if I am being underpaid by Chesapeake?
Sounds like a very hungry lawyer trying to drum up business. If you actually saw the production data you might be able to substantiate being underpaid. Otherwise, proving you have been underpaid is nearly impossible unless it's huge amounts of revenue and many other royalty owners in the area have similar
Based on what evidence Clint? Has Chesapeake cheated you or are you relying on hearsay? I did hire a lawyer when I leased my minerals and there was a lot of communications back and forth until we got what we wanted.
I sure can't answer for Clint or anyone else, and no, I'm not leased to Chesapeake and I'm not even getting any royalty checks right now; but, if you are happy with your checks, then I am happy for you. Chesapeake has proven many times over that they will take care of you, just check out the MRF discussions.
Download the attached example of a Price Data spreadsheet showing a typical Well being Operated by Chesapeake.
A while back they sold 1/4 of their interest in various properties they operate across the US, so in this example you will see two separate sets of numbers for each month's worth of production.
The Column Headed "Gross $/MCF" reflects the amount that Chesapeake and Total separately sold their share of the gas for (an MCF is a 10' x 10' x 10' cube of natural gas).
In May 2012, for gas from the same Well, Chesapeake sold their share of the gas to Chesapeake Energy Marketing, Inc., one of their wholly owned subsidiaries, for $0.333 per MCF, while Total sold theirs to Total Gas & Power for $1.168.
Why the difference? Because Chesapeake is ripping people off.
Back when gas was higher (it used to be up to $12 per MCF here in the Fort Worth area), Chesapeake was ripping people off even more.
On top of this sort of scumbaggery, they are charging you and all their other Royalty Owners for what are called post production costs, such as building pipelines and compressor stations and preparing the oil and gas for market, which I consider blatantly illegal.
If you will send me your Well Name(s) I will pull down spreadsheets like the attached on it or them so you can see what they are doing to you, personally.
Do you know that several years ago, people began adding "No Chesapeake" clauses to their leases?
On March 2, McClendon had been accused by federal prosecutors of rigging bids for drilling rights, a violation of antitrust laws. That same morning, McClendon went to his office, sent a few emails, then ditched his security detail and climbed into his 2013 Chevy Tahoe and headed north out of Oklahoma City. Less than ten minutes later, as he approached an overpass, his car swerved from the right land, veered across the road, and slammed into a bridge abutment at 78 miles per hour and died on impact. Months after his death, many are still dealing with the fallout of McClendon's legacy. The full repercussions of McClendon's collapse may not be known for years.
See Texas Monthly, July, 2016, for the full story.
Thanks, Pat, I had already read the Texas Monthly article. McClendon was the original owner of Chesapeake but had been ousted by his Board by the time he committed suicide (or something similiar). In fact, McClendon had already garnered millions of dollars from investors interested in partaking of his new venture. Most of the lawsuits Chesapeake is undergoing were initiated when McClendon was CEO.
I only owned one small property in Texas and Chesapeake was going to be the operator producing the minerals under it. I sold the mineral rights. One of the best decisions I have ever made. The new owners great grandchildren may recoup the purchase price but possibly not.
Attached is what I could pull down from DrillingInfo.com on your SU81. Chesapeake appears to be commingling production from three separate Wells and SU's, so the files get a little mixed up.
Unfortunately, DrillingInfo does not appear to have information like the example I posted earlier. You may be able to obtain information from the State, however, regarding taxation of production that might help.
