How Long Till Division Order?
Chesapeake has been drillling a well on the land we are pooled with for 3 months now. Arent we suppossed to get a division order by now? I jst read they have started to drill two more wells on that same site. The lease was originally with Fortuna who appears to have sold it to Andarko, who sold part of the lease to Cheseapke (doing the drilling), Matsui & Stat. I have called all 3 companies. All acknowledge they own a part of our lease and that drilling indeed has been going on for 3 months. None have come back with division orders. I was under the impression the law stated they had to start paying royalties within 3 months of removing gas from the site. I noticed that they do not have to pay unless the landowners sign a Division Order. I also noticed that the companies delay giving the division orders so they can say they do not have copies signed by the lease owners, so they can delay payments.
What should we do.
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Replies to This Discussion
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Permalink Reply by James Foster on
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Just because they are drilling does not mean there is production. Do you have pipeline, tanks on pad, seperators, pig launcher. Our well was drilled by Chesapeake in spring 2013. We received unit declaration also in 2013. Pipeline was completed and our well went online in march 16 2014. We received first check for the royslties aug 2-3 2014. In Ohio there is no law about payment but may be in lease. Not sure about PA or WV.
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Permalink Reply by Tom R on
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I'm in Bradford County, near you. Time line for the DO's was close to what James Foster saw. My unit (ATGAS) went into production in March 2013. Got DO from CHK on 7/13/13, Statoil on 7/30/13, and from Anadarko on 8/5/13. The timing had very little to do with when the well was drilled, had been waiting for over a year for pipeline connection to get into actual production. Don't think it will take as long for you as there are existing pipelines running right by the YOST unit, but may take longer than you would like as it seems to be becoming standard practice to allow a "resting period" of up to several months between completion of drilling and fracking the well and actually starting to deliver production. Timing of payment vs. DO is also a little less than sure. I got my first check from Statoil a few days before I got the DO paperwork. CHK's check came the first week of August but did not get one from Anadarko until the first week of September.
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Yes after fracking there is rest period too. Anecdotal evidence seems to show that rest period increases production.
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Does a lessor have to sign a DO before payment and what is the purpose of a DO?
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Permalink Reply by Philip Brutz on
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Ron, you may to want read this thread on DOs.
http://gomarcellusshale.com/profiles/blogs/mineral-management-shale...
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Thanks philip. Now I need to learn if one needs to zign DO in Ohio.
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Ron,
The division order for our well had no attachment that would change the lease and stated so. The farmer who owns the property said that CHK told him he didn't have to sign it.
You need to verify that the decimal fraction for Your ownership is correct. You can sign & send or don't sign and send.
Sit down to open your first royalty statement. It's going to be a Dream Crusher!
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So Ron, in Ohio, you need to sign the DO, is this correct?
I know you and most of us abhor CHK and most industry companies. Here is something to make you feel better. The well we have in Columbiana has an invalid lease for the 10% of the unit we own. I wrote about this in my post UMO/unleased mineral owners. The well went into production and we are waiting for DO's to go out to all in the unit. The next trick they pull since we refused to sign a new lease in the past six months, is PROBABLY to sneak the DO on us and if we sign, they have us. Our lawyers will file a quiet title in Lisbon soon and this should really screw them up. Truth is, I want the 10%, not 20% of 10%.
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Has your company received payment for the well? Why is the lease invalid? You should be in a great position if the lease is actually invalid and here is a producing well. I'm sure chesapeake believes the lease is valid and in full effect though....
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Ron,
According to what the Well owner Bruce Buck told me, he called CHK while he was waiting on a "Friend" to review his DO. He wanted some feedback before signing which was dragging out, so CHK told him he didn't have to sign it.
It appears you get your chump change (whats left after theft) whether you sign or don't sign.
From that, I would say you don't have to sign, but call the producer and run it passed them to be sure.
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Ron hale,
Yes I agree the check will be a "dream
Crusher" for many. My family has received royalties from wells in columbiana, not anything close to what they hoped for. Certainly appreciate the extra money but not anywhere close to what they thought it would be. Less than 70/ acre a month.
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Johnathan,
Take a look at the royalty statement. If you see a large volume of NGLs being taxed then some negative numbers stuck in after charging you 22 cents per gallon in the NGL column with no explanation. You are probably being stolen from.
The 22 cents per gallon is a processing fee you paid (even though your lease may not allow a processing fee) to have a large volume of NGLs processed. If I'm right, the negative amount will be more than you made on NGLs which is then subtracted from the money you made on oil and gas.
The end result is similar to what is going on at the Buck Well 1H, we paid $8,000 to have $85,000 in NGLs taken off the property. That led to a $67 per acre per month income. The producer reduced his costs and increased his production. Everyone loves it but the people who are being stolen from.
If you want a complaint filed send me a copy of the royalty statement (mark out personal data) and I'll generate a complaint summarizing what I find. File your complaint with the Director ODNR, Attorney General and Governor, so no one can say they didn't know about the theft.
email me at mrrxtech_yah@yahoo.com
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