I have 7 producing wells in Converse County and have been receiving royalty payments for approximately 2 years. I recently received a new division order that is actually a correction to one that was effective in Feb. 2014. In a phone call to Chesapeake Energy, they said that a tract had been retroactively assigned to the BLM. This reduces my net acres resulting in a reduction to the unit percentage for calculating payment. Also, since this is retroactive, the impact is that I have a several thousand dollar deficit now. It was also explained that I would not receive any payment on my other wells until this deficit is fully recovered.
Has anyone else had this experience? It just seems odd that this would come up after two years and be retroactive. I'm not quite sure if there is a way to find out if this is accurate and how to confirm the validity of the change.
Any thoughts or advice?
Thanks!
Lucinda,
What is the Section, Township, and Range for these wells? I might be able to look into it and give you some clarity.
The property is in 6-32-70 B 4H. By the way, what is "Craig Team". Are you a mineral owner, land man, or??
Thanks
Haha, Team is actually my last name, so it creates some confusion. I am a mineral owner in WY and also a landman.
I have never heard of minerals being retroactively assigned to the BLM.That's not to say it can't happen, but I would absolutely ask CHK for documentation of this.
Also, when I pull up your section, I am not seeing any of the tracts being BLM minerals. It shows that the entire section is fee minerals. Again, you should ask for any kind of documentation showing how a portion of your minerals got assigned to the BLM.
I hope this helps, but without any additional info this is all I am able to provide.
Thanks. Looks like I really need to spend some time getting better answers and some documentation to back up what they're telling me.
The story I was told by Chesapeake is that this is a federal drilling unit and as such the BLM has the right to determine division of ownership. I was also told that the BLM is "way behind" in doing this for these wells, that it can take up to 2 1/2 years for them to accomplish this, and that they are close to finishing up with Combs Ranch wells and will be starting on other wells soon. I was also told that if a well is not a heavy producer BLM cede's this right to the state of Wyoming, which works much faster. That said, what happened here is that BLM, after this amount of time, re-drew the boundaries of the pool and in doing that excluded acreage that had initially been included. So the pot ended up being smaller, and some people ended up with a smaller share of the pot because some of their acreage was excluded, others ended up with a larger share of the pot because although their included acreage did not change, it became a larger proportion of the pot. Because of this potential problem, Chesapeake now holds royalties on new wells in suspense until the BLM acts,