Has anyone hired an attorney to verify that you royalties are what thery should be ?

We are supposed to be fracked in August and expect royalties sometime in the next year or so. I have every intention of hiring a law firm or an attorney to audit each royalty check for accuracy according to the lease terms as I fully expect that companies will try to take deductions they are no entitled to and various other shenanigans.

Has anyone out there actually done this, and if so what would be some good advice to give to others ?

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Permalink Reply by Cheryl on June 24, 2015 at 9:13am

Ron, What is the document name that you received from CHK?  I'd like to obtain this information for a different well, but need to know what form to ask for.  Thanks!

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on June 24, 2015 at 3:27pm

Cheyl,

     I call it the Chesapeake Energy Theft Spreadsheet.

The only way you can get a Chesapeake Theft Spreadsheet is by filing a complaint with Chesapeake Energy for Failure To Pay Royalties per you lease. Then have an employee in the Revenue Dept that is about to be laid off or is tired of the theft their employer is conducting, so they send you a present.

I doubt that this kind of evidence of theft will be allowed out of the Revenue Dept on purpose. 

If you are leased to Chesapeake, you have a spreadsheet of theft on file. That's how they figure out they only owe you $15 an acre per month regardless of how much oil, natural gas or NGLs have been taken from your well.

Permalink Reply by Rich on June 23, 2015 at 12:25pm
Here is what the O&G co need to worry about they are gonna run into some old man that has nothing to lose and steal his money and he will end up doing things to those people they never dreamed of! Mark my words they are gonna tick off the wrong person! Then and only then will big brother step in and do the right thing! GLTA!
Permalink Reply by bo boboski on June 23, 2015 at 2:08pm

That would be nice, but we are living in a greedy society, those that can do something about it also like to stuff their pockets from wherever it comes from.

Permalink Reply by mark on June 23, 2015 at 11:02pm

mornin rich

believe it or not that scenario already played out up at range resources about 5 years ago in washington county walked in with a machete  guy got arrested but did get there attention and his problem did get resolved QUICKLY lol

Permalink Reply by Suzy on June 23, 2015 at 4:28pm
Thank you Anne. I'm a Realtor in Phoenix and had a boss years ago who told me, when I would get worked up, to pick my battles carefully ... I won't win them all and what the fight would do to me regarding my heart and blood pressure wasn't worth the anger.
It took me a few years to learn the lesson.

Depending on how many acres David has and all of us ... we can't fight the big oil companies. We can't spend all of the profits ... for principal. At the end of the day it doesn't matter. Fracking royalties is the 'dessert' of Life. It's not our Lives.
Permalink Reply by rmc on June 24, 2015 at 5:21am
I tell you one thing I don't believe I'd be interested in is one of those multi state class action lawsuits where the lawyers go behind doors to arrange a out of court settlement and all of a sudden we have amended my lease from a no deductions lease to one that allows deductions.
Permalink Reply by Steven Kacerski on June 24, 2015 at 7:49am

As others have mentioned, finding a CPA firm that has expertise in this area is a must if you're looking to have your royalty statement reviewed or audit performed.  If you need any recommendations let me know. I have worked with someone who is a CPA and use to work in the oil & gas industry so they know the "tricks of the trade" companies will use.

Permalink Reply by Booger on June 24, 2015 at 8:05am

many people here saying it is not worth it because it is too expensive.......there is a law group that is taking cases for a share of the spoils........not a class action, they put cases together per drilling unit.........started with CHK but now sounds like they are moving to most operators.......sounds like they got their shit together..........below is from a thread on gohaynsevilleshale .........also a link to the thread.....it is worth reading.

http://www.gohaynesvilleshale.com/forum/topics/county-royalty-owner...

"So far 280 cases have been filed.  Nearly 20,000 people are signed up.  Cases are filed with royalty owners grouped by drilling unit.  The most people in any one lawsuit is 453 (must be an urban unit), and some cases have a single plaintiff.

The most interesting thing seems to be that McDonald has now determined that all of the major operators have underpaid their royalty owners.  So they now seem to be going after Anadarko, BP, Statoil, Devon, BHP, Matsui, Continental, and others.   This effort does not appear to be limited to CHK.  So if you have any of the other drillers, they ask you to sign up and they will determine if you have been shorted on your royalies.

They think there are two places where you could be short-changed.  First, is that you could be overcharged for the post-production things like compression, marketing, transportation, etc.  Even though many leases allow for deductions, McDonald says there is an implied covenant under the law that these fees must be reasonable.  The second is that if the company used your gas for hedging and kept the profits, they assert that you should have received the higher hedged price for your gas."

Permalink Reply by David Allen Lilly on June 25, 2015 at 12:31am

This is what I was looking for.

I also wondered bout including attorney fees in a lawsuit. If you are a victim of fraud on behalf of an oil and as company wouldn't you be entitled to compensation for attorneys fees as well ?

Permalink Reply by David Allen Lilly on June 25, 2015 at 12:38am

My lease is pretty straightforward, not that it may matter to some of these companies. It seems to be very specific that there are no deductions allowed, but there is a market enhancement clause although it specifically states the net price post enhancement cannot be less that the net price without enhancement.

As for audits I am entitled to one annually, at my expense of course.

I am more concerned short term with being paid a fair market price for ALL of the marketable commodities coming out of he ground and of course not being deducted to death as my lease clearly does not allow.

There is a lot of good advice from this thread, the biggest thing learned is that I should hire  CPA to audit my monthly royalty checks for accuracy and not  law firm.

I am curious if Antero will co-operate with me since I am signed with them and being drilled by the dreaded Chesapeake and their horrendous reputation. As to this moment I am not aware that Chesapeake has bought my lease, leaving me to assume their is a joint venture in play.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on June 25, 2015 at 4:34pm

David,

      Look at the history of Chesapeake in all the shale plays and you won't be surprised when the Royalty Checks start and no one wants to hear that you are being stolen from.

Buck Well 1H got a Royalty of $16 per acre this month, I keep forgetting to deposit the check in the bank.

Now if you have 1000 acres you might have a respectable check to cash, but not a respectable royalty for the products taken from your land.

You'll need the Chesapeake Spreadsheet I attached to an earlier reply to you so you can figure out how this could happen.

I have an explanation of what the spreadsheet columns are for.

I call it Theft.

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