CHK and their state of confusion on royalties.

   After over 3 years of royalties seems like it never ends . It never has been easy working with CHK. But the letter I got last week probably takes the cake. It states I owe them a little over $ 9,000. They're telling me that the well was set up wrong in the beginning with Stat oil and CHK. Supposedly they are partners and CHK was marketing Stat oil gas so we only received a check from CHK. Now Stat wants to market their own gas CHK SAYS we owe them Stat oil percentage they paid us and Stat oil owes us . Something just doesn't seem right about all of this.

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Permalink Reply by S S C on November 17, 2014 at 10:14am
Oh, they MUST be kidding!
Permalink Reply by David Mohn on November 17, 2014 at 11:01am

You might try sending them a check but take deductions like check processing fees, accounting fees, bank fees, mailing fees, administration fees, and I am sure there is a few other you could come up with.  Just in my humble opinion.  

Permalink Reply by bo boboski on November 17, 2014 at 10:45pm

Yes! Great Idea.  all those deductions need to come to ,say, $9000.  ???

Permalink Reply by Frank Walker on November 17, 2014 at 12:17pm

Pacman, respectfully:

Contrary to earlier posts, this is not a joking matter.  Not at all.  Be aware that in the ArkLaTex Chesapeake Energy filed suit against its own Lessors to force disgorgement of (what CHK claimed was) money owed.  Chesapeake is NOT AT ALL confused.  You need to abandon that notion right now!!  They are dead serious, they have you in their sights, and they will stop at nothing to get their way.

I wish you all the best.  I surely do not envy your situation one bit!

Permalink Reply by pacman on November 17, 2014 at 1:22pm

  Believe it or not I talked to Stat oil about this and they had no idea CHK was going to do this. In the meantime they cut off all our royalties until we pay them off. This is goin to be a real mess . First Stat oil has to agree to pay us so we can pay CHK.

Permalink Reply by Alan Bowers on November 17, 2014 at 4:12pm

Pacman,

Was your letter from CHK signed by an actual person?

Would you be willing to post the name of the person from Chesapeake that signed the letter asking you to pay them the $9,000.00?

Permalink Reply by S S C on November 18, 2014 at 1:19am
Why doesn't statoil pay chk direct and leave you out of it? It is their agreement and their mistake. Something seems fishy here.

This situation cries out for a landownwer group to work together.
Permalink Reply by Frank Walker on November 18, 2014 at 1:58am

Pacman

I totally believe Stat had no idea of what CHK was going to do.  Chesapeake hungers rapaciously for money in every venue in which the company operates.  Their aggressive behavior, all the lawsuits, you must have read about these things here and elsewhere.  When you deal with Chesapeake you are dealing with a pit bull . . no . . with a large shark.  Beware!

And please don't be angry, but I want to repeat this because it's important and true:  Chesapeake is not confused!  Chesapeake knows exactly what it is doing.  Everything with them is calculated and planned.  And if you don't like it, they will be delighted to see you in court!!

Permalink Reply by pacman on November 18, 2014 at 3:10am

  I asked them why they can't pay Stat oil direct. Their answer "its not going to work that way." Stat oil talked to me on the first phone call and said they need some time to figure this out which I understand. Could be why our checks are coming in the name of Cheasapeake Operating (since January) instead of Chesapeake Appalachia. Do you think they are expecting some trouble from this?????'

Permalink Reply by Frank Walker on November 18, 2014 at 3:27am

Expecting trouble?  Dunno.  Prepared for trouble?  Almost certainly.  Chesapeake has found itself in a three way situation and is taking steps to be certain no money is lost.

Normally, when there is an over payment, the gasco will get their money back by withholding royalty money from future royalty payments.  This way the Lessor is not harmed by having to cough up money already spent, money the Lessor simply might not have on hand.  But doing this means the gasco must wait to be paid back.  Sadly for you, Chesapeake is not the kind of company that likes to wait for its money.  If you have to borrow money or sell a vehicle (or whatever) to get the money they want now, Chesapeake could not care less!!

Permalink Reply by S S C on November 18, 2014 at 3:19am
Well, that is a good answer when chk says please give them $9000. 'It's not going to work that way'. They will try to get the money the easiest way and if the landowners are easier to push around and less lawyered up than statoil, they will try to get it from the landowners.
Permalink Reply by wyalusing jim on November 18, 2014 at 4:17am

this sounds like an opportunity to me.

my response would be that I am willing to comply with their request for repayment pending receipt of sufficient proof through documentation of the amount requested.

the documentation needs to include all relevant receipts, as well as meter readings and btu analyses, calibration dates, etc. to prove the exact figure that they claim you owe.

I would want each transaction documented as well as the methodology used in allocating my wells' share of the gas in such transactions.

of course you would need both the incorrect as well as the correct documentation to make a comparative analysis to arrive at the correct amount owed.

afterall, since they made the mistake which created this situation, it's hardly fair of them to expect you to accept that they are correct at this point.

wj

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