Royalty $ per acre

I know it varies greatly, but Anyone already receiving checks have any insight on per acre per % royalty #s? Leased with 20 %.



Thanks!

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Permalink Reply by Jeffrey Beunier on August 8, 2014 at 11:53pm

it looks like the production reported for the lease is questionable - the check mostly covers 4/2014 (oil for 10/2013 is on it - but probably a correction)

below is the reported data I was able to pull down from DI Desktop - you will note that production through December was significantly higher than the gross lease production in the check stub above.  I would check with the state regulatory agency where CHK reports production data to and compare it to your checks to see if they match

OHIO (WV)
(N/A) 00 0
Operator: CHESAPEAKE APPALACHIA, LLC
Field: UNKNOWN (MARCELLUS SHALE) Reserves
Start Date : 10/1/2012
Start Rate : Oil: 0/day Gas: 0/day Water: 0/day Wells: 0/day 
End Date : 12/1/2013
End Rate : Oil: 0/day Gas: 0/day Water: 0/day Wells: 0/day 
Date Act/Proj Oil Gas Wells
Oct-12 Actual 2338 37836 1
Nov-12 Actual 3076 73758 1
Dec-12 Actual 2441 80886 1
Jan-13 Actual 2148 61928 1
Feb-13 Actual 2332 82645 1
Mar-13 Actual 2360 99266 1
Apr-13 Actual 2162 81765 1
May-13 Actual 2191 79755 1
Jun-13 Actual 1207 68754 1
Jul-13 Actual 340 77923 1
Aug-13 Actual 2153 73042 1
Sep-13 Actual 1363 68605 1
Oct-13 Actual 1221 67805 1
Nov-13 Actual 1136 65104 1
Dec-13 Actual 1095 59867 1
Estimated Reserves 0 0 0 0
Prior Cums 0 27,563 1,078,939 1
Ultimate Recoverable 0 27,563 1,078,939 1
Permalink Reply by Tony Yurina on August 9, 2014 at 12:02pm

Jeffery,

The check stub is for mostly the 4-2014 period.  You need to see the 2012 and 2013 statements to compare the Di data correctly.  If this were mine, I'd be watching like a hawk!! 

Permalink Reply by Jeffrey Beunier on August 9, 2014 at 12:59pm

I agree, as I said the data on DI only goes up through 12/2013 and the main part of the check is 04/2014 - the 10/2013 could be a corrective entry. 

However, even with the material decline experienced in these wells, to go from ~60mmcf per month (about 2 MMcfd or 2000 Mcfd) in 12/2013 to 319 Mcf per month (10 mcfd) is odd.  That's actually more than just odd, hence why I suggested that they check the production numbers on their checks to the amounts reported for production.  I tried finding it online but only see where WV summarizes annual production by well - the  info and link follows

link to state records:

http://www.wvgs.wvnet.edu/pipe2/OGDataSearch.aspx

WV Geological & Economic Survey: Well:   County = 069 Permit = 109 Report Time:   Saturday, August 09, 2014 1:14:05 PM

Location Information:    View Map  

API COUNTY PERMIT TAX_DISTRICT QUAD_75 QUAD_15 LAT_DD LON_DD UTME UTMN

Bottom Hole Location Information:

API EP FLAG UTME UTMN LON_DD LAT_DD

Owner Information:

API CMP_DT SUFFIX STATUS SURFACE_OWNER WELL_NUM CO_NUM LEASE LEASE_NUM MINERAL_OWN OPERATOR PROP_VD PROP_TRGT_FM

Completion Information:

API CMP_DT SPUD_DT ELEV DATUM FIELD DEEPEST_FM DEEPEST_FMT INITIAL_CLASS FINAL_CLASS TYPE RIG CMP_MTHD TVD TMD NEW_FTG G_BEF G_AFT O_BEF O_AFT P_BEF TI_BEF P_AFT TI_AFT

Pay/Show/Water Information:

API CMP_DT ACTIVITY PRODUCT SECTION DEPTH_TOP FM_TOP DEPTH_BOT FM_BOT G_BEF G_AFT O_BEF O_AFT WATER_QNTY

Production Gas Information:

API OPERATOR PRD_YEAR ANN_GAS JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DCM

Production Oil Information:

API OPERATOR PRD_YEAR ANN_OIL JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DCM

Stratigraphy Information:

API SUFFIX FM FM_QUALITY DEPTH_TOP DEPTH_QUALITY THICKNESS THICKNESS_QUALITY ELEV DATUM

There is no Wireline (E-Log) data for this well

There is no Plugging data for this well

There is no Sample data for this well

Permalink Reply by adam sorell on August 12, 2014 at 11:33am

Anyone know how to read production?? Looks like it has 2012 figures . I'm not sure what i'm looking at. To me it looks like the well only produced for 3 months  in 2012???Can someone explain.

http://www.wvgs.wvnet.edu/oginfo/pipeline/pipeline2.asp?txtsearchap...

...

Permalink Reply by James Foster on August 9, 2014 at 2:15pm
IMHO this well is not producing. Pipeline? Evidence of production at pad? Fall 2013 you have flowback (oil) was sold and now so much time has passed royalties need to be paid. You have basically no production in April. The 1113 and 0414 are month and year. Our producing well has two entries per month per product type ... Also a chesapeake well. There is a guide to there stub on another thread and on their website. The 1,2,4 is product. See key at bottom. Can you look up well card online and see reported production on WVDEP. We are lucky in Ohio we can easily look at well card.
Permalink Reply by adam sorell on August 10, 2014 at 7:48pm

Hello james. What do you mean 2 entries?? Do you mean 2 checks per product type??? How many checks a month??

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on August 10, 2014 at 10:00pm

Adam,

    Your response has been sent.  Thanks  Ron

Permalink Reply by adam sorell on August 11, 2014 at 8:55pm

I spoke to the lady today. She told me there are 3 wells and CHK is 3 month behind when they make royalty payments. She also said she was just informed they are going to cap it and redrill.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on August 10, 2014 at 1:33pm

Adam,

        Have your friend contact the WV Attorney Generals Office to file a complaint. The sooner the better.

If you want to know more, contact me at mrrxtech_yah@yahoo .com.

Permalink Reply by adam sorell on August 13, 2014 at 7:54pm

WSJ TODAY-CHK'S ROYALTY ABUSES IN PA

 Noting the recent posts regarding disgruntled NG consumers I, especially in New York State, I was not going to post this WSJ article regarding CHK and their shoddy performance in PA.  Then I thought, bad actors such as CHK and politicians both whom choose to screw their constituents must be identified and exposed for what they are, SELF SERVING EGOMANICS WHO ARE ONLY INTERESTED IN LINING THEIR OWNS POCKETS. 

The WSJ link:
 

 

Chesapeake Accused of Underpaying Gas Royalties

Outcry Prompts Pennsylvania Governor to Call for Investigation

By Tom Fowler
 

 

Pennsylvanians who embraced the natural-gas drilling boom that has swept the state are starting to sour on one of the biggest names in the business: Chesapeake Energy Corp.                                                     

Some property owners are accusing Chesapeake of shortchanging them on royalty payments for pumping oil and gas from their land. The public outcry has grown so loud that Republican Gov. Tom Corbett, a longtime industry supporter who has received campaign contributions from the company, wrote an open letter last month asking the state attorney general to investigate.

Chesapeake declined to comment on the  royalty disputes, but said in a recent letter to the governor that it is abiding by the terms of its contracts with landowners.

In Bradford County, a rural area in northern Pennsylvania where a lot of the drilling has taken place, anti-Chesapeake sentiment is running high, said Doug McLinko, a county commissioner. "Bradford County is a pro-gas part of the country where we support hydrocarbons 100%," he said, "but we don't support everyone who's doing it".

 

Landowners typically receive monthly royalty payments when a company extracts oil or gas from wells on their property. The payments usually are a fixed percentage of the market value of the oil or gas or the proceeds from selling it.

In some cases, energy companies deduct the costs of transporting, processing and marketing the oil or gas. The size of these deductions, and whether Pennsylvania law can limit the deductions, are at the heart of the royalty disputes.

Disagreements over royalties are common in the industry, and Chesapeake is hardly the only company facing them. But Chesapeake's deductions and fees appear to far surpass those taken by other energy companies operating in Pennsylvania, including Anadarko Petroleum Corp. and Statoil, based on royalty checks from the companies reviewed by The Wall Street Journal.

 Need to add here, but the WSJ site is currently acting up.  The articles' final paragraph below, which seems ridicules, might occur.  An individual might have 1 acre in a 640 acre Unit & therefore receive 1/640 of a royalty check.  Experience tells me, a lease agreement from CHK was heavily weighted in CHK's favor.  Such is a snake!  THE PA folks were unsophisticated mineral owners & were taken.  CHK likely overpaid to lease the land ... Greed in OK. & in New York by politicians.  Have a good day, Winter returns!
 
Glenn Aikens, a farmer in Litchfield Township, said royalties from his three wells have been so tiny they don't even cover the added tax he owes now that his land is classified as a commercial property because of the drilling. He received several small checks from Chesapeake last year, including one for 10 cents and one for $1.10.

"With the differences in taxes, I'm paying them to take my gas," Mr. Aikens said.

Write to Tom Fowler at tom.fowler@wsj.com 

Permalink Reply by RAYMOND bAUMAN on August 11, 2014 at 11:15am

Lets straighten something out Royalty per Acre is not an a rational measure. Delay rental per acre is a measure. Royalty per acre is not rational because royalty is based on production, sales and has nothing to do with acreage.  Because production varies with each well  and acreage in each production unit you cold only compare royalty in a production unit ( but then just compare %).  You could average it over each county or township but then you need to calculate the averages of each unit ( well)  by the acre. and then what do you allocate to an un-unitized or un-drilled acre. Then how do you handle  Transportation and Marketing costs allocated to royalty ( it may be different for each well or lease). 

Permalink Reply by bo boboski on August 11, 2014 at 11:22am

Very True,Ray, BUT,  if people would tell us what kind of royalties they are getting,and tell what state/Twp. Well name.l% on their lease. Some of us could take it from there and see what can be expected from wells in that area. Just saying like,"Im get $300. per acre" would be about useless.

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