Replies to This Discussion

Permalink Reply by PLOVER on April 19, 2013 at 4:01am

"if chk does not own the gas at that physical point, why is gathering a legitimate deduction?"

... CORPORATIONS OFTEN USE SUBSIDIARIES FOR THE PURPOSE OF MANIPULATING CONTRACTUAL OBLIGATIONS (LEASES) ... SO IN THIS INSTANCE CHK WORDS THEIR CONTRACT WITH C.E.M.I. TO ALLOW FOR DEDUCTIONS FROM THE WELL HEAD PRICE TO TGP ZONE 4 FOR THOSE LEASES THAT DO NOT SPECIFICALLY PROHIBIT SUCH.  

IN ORDER TO EVALUATE THIS ISSUE PROPERLY THE ACTUAL CONTRACTS INVOLVED WOULD HAVE TO BE SCRUTINIZED BY AN ATTORNEY SKILLED IN SUCH. 

Permalink Reply by wyalusing jim on April 19, 2013 at 6:33am

Reply by PLOVER

" SO IN THIS INSTANCE CHK WORDS THEIR CONTRACT WITH C.E.M.I. TO ALLOW FOR DEDUCTIONS FROM THE WELL HEAD PRICE TO TGP ZONE 4 FOR THOSE LEASES THAT DO NOT SPECIFICALLY PROHIBIT SUCH. "

maybe...maybe not. we simply do not know the terms of the agreements between these subsidiaries...yet.

but one point not to be overlooked is, that our leases are with chk appalachia, not c.e.m.i. and not with chk energy inc. if these subsidiaries' are operating independently in terms of their revenues then it would be a stretch for them to be including their costs in the form of deductions on each others' documents.

and another thing to be considered too, is that chk currently has its' own subscribed capacity on the tgpl. the point of sale for c.e.m.i. may not be the tgpl. c.e.m.i. may be transporting the gas across the tgpl using chk energy's capacity to anywhere on that line thereby increasing their profits even greater. in other words, they may be physically buying the gas at the wellhead, and selling it in n.y. city, making themselves a couple of bucks a thousand extra.

nothing wrong with that, as long as it's all within the lease terms and is according to state law. that's just business.

i would like to understand how the business works to the best of my abilities, that way i can know whether or not the terms of my lease are being honored.

and too...i'm a real curious kinda guy. i love this stuff.

wj

Permalink Reply by melissa humphrey on April 23, 2013 at 9:25am

Chesapeake claims they transfer ownership to CEMI, marketing arm, CEMI sells the gas post, post-production costs. Chesapeake and landowner then earn theh same price.

Many or all corporations of size have various subs for legal seperation primarity. It isn't manipulation of contracts.

Key legality in question becomes PA corporate legal precedence re subs. And that "don't" look good for

CHK. We think CHK is in retreat preparing some compromise they hope to win.  

CHK has become so disliked, Chief, TLM and others are picking up exporing leases next to CHK existing units.

Life is moral, we are not and comeupance is being doled out.

McLendon lost 3B$ personal October 2008, who wants to own or deal with  a company with a

nut gambler like that> someone who would bank at IndyMac perhaps.

Permalink Reply by wyalusing jim on April 23, 2013 at 10:06am

hump is talking about me, i had indy mac cd's before the crash. worked out great for me, highest interest rate i could find, but hump doesnt like acknowledging that i could ever do anything right. for him, this is personal...for me, it's just fun.

speaking of aubrey, last time i called chk, i took a little poll. i got transferred around and talked to 4 different analysts about various issues.

i asked each of them if they missed aubrey, they all said yes. i told them that i do too, and that i was glad to see that he landed on his feet.

i make no apologies. i believe that aubrey and his rush to lease in the marcellus benefitted many of us. it is my opinion that his leadership of chk pushed them to the $5750 mark and beyond in a few cases, so any of us who signed good high dollar leases should be thanking him for that.

and i'm not in any way defending chk's misbehavior, but forewarned is forearmed, when we leased to chk, each of us should have known that we were dancing with the devil.

wj

 

Permalink Reply by Frank Walker on April 23, 2013 at 11:21pm

Melissa respectfully:

Chesapeake appears uncertain about what you wrote here in your first paragraph.  As evidence of that, I offer a lift from Wyalusing Jim's post less that one week ago on this very thread:

"while i was on the phone with chk, i asked where the first point of sale was for the gas from that well. without hesitation, the analyst for that well stated unequivocally that chk appalachia is selling the gas "at the wellhead". i then asked if the sale was to c.e.m.i., and she said that she didnt have that info handy."

Course it might just have been an instance of an uninformed CHK employee, perhaps a new employee unfamiliar with routine CHK matters.  Dunno.

Alternatively, it's possible wyalusing jim had the misfortune of reaching a CHK employee who had not yet received CHK's "lies du jour" memo for that day.  Integrity is important at CHK as an object of study.  One of these days they might even incorporate it as an underpinning of the corporation, provided of course profits not be impacted.

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