Screwing Royalty Owners Means Chesapeake is Stealing Cash

http://www.forbes.com/sites/christopherhelman/2014/03/17/screwing-r...
Here's a good article with a summary of Chesapeake's history of underpaying royalties which applies to everywhere they operate.

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Permalink Reply by Todd on April 12, 2014 at 5:36pm

Highlighting the last paragraph of the article:

As Chesapeake summed up in its latest annual report: “The company is defending against claims by royalty owners alleging that we used below-market prices, made improper deductions, used improper measurement techniques and/or entered into arrangements with affiliates that resulted in underpayment of royalties in connection with the production and sale of natural gas and NGL. Adverse results in pending cases would cause our obligations to royalty owners to increase and would negatively impact our future results of operations.”

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on April 12, 2014 at 11:28pm

Translation: cash flow will be severely impeded even after we settle these matters in court, so look out below.  

Permalink Reply by bo boboski on April 13, 2014 at 6:32am

Don't buy it. They will just have to pay the landowners what they had coming in the 1st place. What they planned on paying from day one,before they drilled and added up the #s.Maybe they thought they could withhold that $$$ ,use it, then hope nobody noticed ,so they could maybe just keep it.  WRONG!

Permalink Reply by David Mohn on April 13, 2014 at 9:33am

Well I know one thing.  A few years ago CHK had staked out a well site, tested the ground, did well water samples of all my neighbors but then left the oil window.  I live in the far southeast area of stark county.  I am now thinking of building a run in barn in the place they were going to put a drill pad just because of all the bad publicity CHK is getting.  Not sure I want a pad on the farm and then have to put up with what they are doing to land owners and loose the acres of my farm.  Does anyone have any thoughts on having a drilling pad on their land with what CHK is doing.  I welcome any responses. 

Permalink Reply by mark ondrusek on April 13, 2014 at 9:45am

I have one...not worth the money.  the only good thing about it..most of your land will be in a unit!

Permalink Reply by David Mohn on April 13, 2014 at 3:04pm

So if you could do it over again Mark, you would have sign a no surface rights lease.  It seems like even if all your farm is in the unit, CHK will still only give you a small amount.  I am beginning to think loosing the use of my land and looking at a well site isn't worth it.  Might just build that barn before it is too late.

Permalink Reply by Doug Duffield on April 13, 2014 at 4:09pm

Having a pad is no big deal, an added source of entertainment once the cows were gone.

Permalink Reply by mark ondrusek on April 13, 2014 at 4:22pm

chk would not do a non surface clause at the time.  we  have 110 acres and chk put the pad right beside our house and barn.  if I had to do it all over...I would spend the money and hire a good gas lawyer!!

Permalink Reply by Robin Hood on April 13, 2014 at 9:45am

 This is their MO. Chesapeake is holding our lease thru a thorough disregard of the terms of the lease.

They do what they want until they are taken to court. Then before the summary judgement they settle with a required confidentially agreement.

They average landowner can't afford justice against a multibillion dollar company with a building full of lawyers. 

This forum and others like it are our best defense against these tactics. We share our knowledge and bring their wrongful acts to the light.

Permalink Reply by Frank Walker on April 13, 2014 at 5:22pm

The activities of Chesapeake cast a long shadow over the entire industry, providing fodder for our rabid opponents and making it more difficult for honest operators to function.  But this has been going on a long time and in multiple states.  You would hope landowners might stop leasing to Chesapeake.  But if that's happening, I'm not aware.  For goodness sake, get the word out!

Permalink Reply by David Mohn on April 13, 2014 at 6:38pm

Frank, I would agree with you.  Back in 2010 when I signed, I was naïve about CHK and I guess I never checked into them as fully as I should have.  Back in 2010, they were the only ones leasing and I was use to the 10.00 per acre per year lease for 5 years.  I guess that is why it is called 20/20 hindsight.  I know if my lease does run out and is not renewed, I will not sign with CHK even if they take the market enhancement and arbitration clause out of the lease.  Your still at their mercy at what THEY decide to pay you.  Not what is owed to a landowner.  Right now my only recourse is to build small barns where they want to put a drilling pad.  By the time this is done, I might have a barn for everyone animal I have, even the dogs! 

Permalink Reply by mark ondrusek on April 13, 2014 at 7:03pm

in northwest beaver county chk is the only game in town.  they are dictating the rules and playing hard ball.  they have us by the balls!

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