Beware of all the gas companies!

I signed two lease's back in 2011 with Gulfport Energy on 80 acres that I own in Belmont County, Ohio. Let me start by saying don't believe anything that any of the land men tell you, the are working for the gas companies and their own benefit not yours period. While I was negotiating my lease with several companies at the time in 2011. I clearly explained to them that any lease I would sign would require a Pugh clause, and that I would not except any lease that required me to pay any of the cost associated with the production or marketing of the finished product from any wells drilled onto my property. I ultimately ended up signing with Gulfport Energy because of the higher bonus payment and higher royalty percent, and the land man assured me the Pugh clause and the deduction clause weren't a problem, that a lot of people were requesting it. Well the land man was lying through his teeth after receiving my first royalty check and statement there were $14,574.11 in total deductions. Beware of any lease that includes the language below.

 

"All oil, gas or other proceeds accruing to Lessor under this lease or by state law shall be without monetary deduction, directly or indirectly, for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and marketing the oil, gas and other proceeds produced hereunder to transform the product into marketable form; however, any such cost which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor’s share of production so long as they are based on Lessee’s actual cost of such enhancements.  However, in no event shall Lessor receive a price that is less than, or more than, the price received by Lessee."

 

It was explained to me that this was exactly what I wanted and that the second part of this clause only meant if they did any advertising to enhance the selling price of the finished product I would have some associated cost from that. Well I have since found out that this is the language that the big oil companies have adopted to lead land owners to believe that they are getting a no expense deducted clause in their lease. If you find this language in your current lease be assured be ready to pay every single cost that is associated with bringing the product to market. Don't sign it! Ask clearly for a no production cost clause and have it reviewed by a gas royalty attorney.

Views: 36783

▶ Reply to This

Replies to This Discussion

Permalink Reply by Darlene Newton on November 13, 2013 at 2:21am

They most certainly did I paid pack my royalties to Chesapeake for the last 2 to 3 years!  That's where all the money went , gosh how I love those gas companies!  My 3000.00 checks a month checks trickled to luckily 200.00 bucks!  I think they allowed me a couple of hundred cause they felt sorry for me!  I

Permalink Reply by Darlene Newton on November 13, 2013 at 2:21am

I am not lying!  BEWARE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

Permalink Reply by Philip Brutz on November 13, 2013 at 2:29am

Would you be willing to post a copy of  Chesapeke's demand for refund?  Blacking out all of your personal information.

 

Permalink Reply by JREwing on November 13, 2013 at 2:46am

If what she is saying is true,  I owe her an apology.  I didn't fully understand or appreciate what she was saying Chesapeake had done to her.  Retroactively collecting market enhancement costs is despicable and reprehensible. 

Permalink Reply by Darlene Newton on November 13, 2013 at 3:40am

Phillip as soon as they see it they will know it is me!  I do not believe there is any names I have used !  If they go after me who is going to protect me?  Are you?  Is Anybody?  You ask Tina Pickett cause when they started taking that money out she said there was nothing they could do contact YAW!  What a joke that is! 

Irrehensible is correct , do you understand now WHY I am telling you my story!  I hate Chesapeake, they are the scum of the Earth!  

Point being when my fish start to die I am going to sue the unliving God out of them cause it ain"T to F-ing hard to see the visual signs of the methane, and the methane in my well!

NO ONE has stood up for the people Phillip NO ONE!!!!!! The only thing I have left is my MOUTH and I plan on using and I suggest all of you FACEBOOK them SCREAM at your Representatives!

Remember they went back on me and my family and unless they fix the law they will do it to you!!!

And Yes Mr dead man, I forgive you, I thought I used RETROACTIVE to think you understood what they did!  So you see I paid taxes on that money they took back, I am paying enhancement charges of which I believe I am entitle to that!  I guess If I had to pay it I should benefit from it!  Right!

I have demanded a refund they ignore me!  

Permalink Reply by Ragnars Repo on November 13, 2013 at 3:59am
Darlene I believe you are being ripped off, however your argument loses credibility from there. You claim your water is ruined, fish are going to die, and that your home is going to explode from the methane in your well. It wasn't until your royalty check started to disappear that you voiced your concern here. So what gives?
Permalink Reply by Finnbear on November 13, 2013 at 7:35am

How about posting the API well number so we can look up the production records on the state website? The decline curve on some Marcellus wells has been steep.

Permalink Reply by Finnbear on November 13, 2013 at 7:17am

Darlene

I'm not sure I'm following this situation completely. Do you mean they sent you royalty checks and then came out and took them back? How long after they paid you did they take the money back? How did they take the money back? At the barrel of a gun? Did you voluntarily send them a check? Under what legal authority did they take money back from you? Did they just remove the money from your bank account? If you'd already paid taxes on the royalties, you should be able to claim a loss for the money you returned on your next tax filing.

Permalink Reply by Darlene Newton on November 13, 2013 at 7:30am

THIS IS THE LAST TIME I AM EXPLAINING THIS!  OUR WELL WAS ONE OF THE FIRST WELLS, WHEN THEY PASSED THAT LAW A FEW YEARS BACK CHESAPEAKE TOOK THAT AS A PERMISSION SLIP TO TAKE ALL THAT MONEY BACK.  SO OUR WELL WAS PRODUCING FOR QUITE A FEW YEARS AND WHAMMY THEY WENT BACK TO THE FIRST DATE THE WELL WAS TAPPED.

WHAT LEAGL AUTHORITY DID THEY HAVE THEY HAD CORBETTS AND YAWS PERMISSION!  IF YOU THINK I AM NOT THE ONLY LANDOWNER AFFECTED BY THIS I CHOOSE TO RUN MY MOUTH!  SO I DO NOT CARE WHAT THEY SAY TO YOU THEY CAME BACK AFTER THE LAW WAS PASSED AND TOOK BACK ALL THAT MONEY!

THEY DO WHAT EVER THEY WANT AND JUST HOW DO YOU THINK A LITTLE WOMAN LIKE MYSELF !  THEY TAKE THE MONEY OUT OF THE CHECKS I GET EACH MONTH !  I HAD NO CHOICE AND NEITHER DID MY NEIGHBORS.

Permalink Reply by Ragnars Repo on November 13, 2013 at 7:38am
Which law? Where are the other landowners? I'm looking at the Bradford county site and I see people talking about decline curves, but I don't see anyone with as much outrage. None of them are mentioning anything remotely close to what your talking about.
Permalink Reply by JREwing on November 13, 2013 at 7:44am

I think she has one of the oldest wells in the Marcellus in Bradford and was paid a full 1/8th royalty prior to the Kilmer decision coming down.  Prolly not too many other land owners in her specific situation.  Just about everyone one else has been used to paying enhancement costs since they got their first check...

Permalink Reply by Darlene Newton on November 13, 2013 at 7:52am

It is there believe me, it is called fear, Chesapeake is also using the threat to shut of the wells!  Then what are they to do?

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service