CHK and Total agree to pay Royalty owners 52.50 million dollars (US) they claimed they were cheated out of.

I don't know when it became fashionable for Operators to act like Clip Joints, but it happened.

Check it out:

Chesapeake Energy (CHK -0.4%) and Total (TOT -0.6%) agree to pay $52.5M to 13K people who claimed their royalties were underpaid for leases in the Barnett Shale.

As part of the agreement, CHK will provide $29.4M upon court approval of the settlement and another $10M in three years, while TOT will pay $13.1M in cash when the deal is finalized.

TOT agreed two months ago to pay $6M to settle a similar royalty lawsuit brought by the city of Fort Worth, which also sued CHK, and lawyers involved in the litigation say they expect CHK to settle its part of that litigation soon.

No trial so no one knows who actually did what (officially).

Per capita it's over $4,000.  I know it won't be paid out that way, but it's a large sum of money.

The Plaintiffs must have wanted to ring CHK's neck.

No one likes getting ripped off. 

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Permalink Reply by Joseph-Ohio on May 24, 2016 at 7:52pm

Thank you once again Mr. Butler.

Looking into it.

J-O

Permalink Reply by Joseph-Ohio on May 24, 2016 at 9:07pm

Mr. Paul Butler,

Tried to interpret Article III of (your referenced) Uniform Commercial Code which to me as a layman seems ambiguous in explaining differences between 'Negotiable Instruments' and to me also seems to just lump them all together as such.

So I then went to a blog site called 'StackExchange' and found the following :

'Many of these products are similar in nature and often depend on the issuing bank.

Cashier's Check Are checks signed and guaranteed by the bank. This means the funds are coming from the bank instead of your account -- which usually means they immediately take the money from your account. This is usually the most secure of the options and usually doesn't have many restrictions.

Certified Check Are checks signed by the customer, certified by the bank that you have enough funds and that your signature is genuine. Usually, but not always - the bank will set aside the funds.

Bank Draft Similar to a certified check but the bank will set aside the funds until the bank draft is used. Generally used in transactions involving larger sums.

Money order It's a payment order similar to a certified check; however, it needs to be prepaid. Also money orders may have maximum face values'

Then the site provided the following comments :
Good answer - any comments on which is most susceptible to fraud? – MrChrister May 4 '14 at 0:27
    
Money order is sometimes used in money laundering -- There are scams involving fraudulent cashier's checks. Usually along the lines of someone paying in excess of the purchase price and asks for the difference. The payee's bank credits the seller's account before getting funds from the paying bank and the seller is out the difference (the excess amount) – Abraham May 4 '14 at 0:55
    
@MrChrister I'd say all of them are susceptible. Money orders and cashier's checks are many times accepted in lieu of cash, but it takes at least several days for fraudulent ones to bounce, so these are more likely to be used in fraudulent schemes. Drafts and certified private checks are more likely to be held for clearance so they're not as useful for criminals since they wouldn't be able to withdraw the money before the forgery is discovered. – littleadv May 4 '14 at 7:12
    
I agree. Seems like good stuff for the answer, no? – MrChrister May 4 '14 at 7:45
    
I'd add: To the best of my knowledge, the first three can only be obtained from a bank. Money orders can be obtained from the post office and various other sources. – Jay May 5 '14 at 4:13
    
I think pretty much any form of payment is susceptible to fraud. Con men can forge a cashier's check, make counterfeit cash, etc. Cashier's checks and money orders are generally considered pretty safe as at least the person making the payment can't just write one up himself with an ordinary checkbook and a pen. It takes a certain amount of skill to forge a cashier's check. Not a huge amount, but at least some. – Jay May 5 '14 at 4:15
    
@Abraham, Due to differences in international usage of the terms, you should indicate which source/country you get this info from. – Pacerier Apr 27 at 18:37 

Seems to help me a little - so what's your read Mr. Butler ? ?

Permalink Reply by Joseph-Ohio on May 25, 2016 at 9:39am

Here's a couple of thoughts / I interpretations of mine (For What They're Worth or Not Worth) :

1) Any kind of 'Check' takes some time to 'clear' (which can be two (2) or three (3) days) - which may or may not be problematic.

2) A 'Bank Draft' is purchased by the 'Drawer' from the 'Drawer's' bank and then sent to the 'Payee's' bank and the funds are supposed to be immediately available to the 'Payee' (upon the 'Payee's' demand).   In the leasing instance we're discussing the 'Drawer' is the Lessee and the 'Payee' is Lessor. Wondering, in the instance of a 'Bank Draft' and considering the funds are in the possession of the 'Payee's' / Lessor's bank, if the 'Payee' / Lessor, would encounter any issues / delays at his / her bank insofar as securing their funds would be concerned ?

That's all I can think of for right now

Permalink Reply by Paul Butler on May 23, 2016 at 5:51pm

From Houston Chronicle (Fuel Fix)

Mark Curriden

The Texas Lawbook

Oklahoma-based Chesapeake Energy and Total E&P USA agreed Monday that they will pay $52.5 million to 13,000 people who claimed their royalties have been underpaid for leases in the Barnett Shale.

As part of the agreement, Chesapeake will provide $29.4 million upon court approval of the settlement and another $10 million in three years. Total will pay $13.1 million in cash when the deal is finalized.

The lawsuits, filed in 2014 and 2015 in Fort Worth, by residents in Johnson County, Tarrant County and Dallas County accuse Chesapeake and Total of failing to pay royalties the companies agreed to in their contracts. The payments will vary widely among the 13,000 claimants – from only a few hundred dollars for some to several hundred thousand dollars for others.

“After three weeks of good faith mediation led by a former federal judge, the case has been resolved to our satisfaction, though it is subject to our clients’ written approval,” said George Parker Young, a partner at Circelli, Walter, & Young in Fort Worth who represents many of the plaintiffs. “We are pleased that we have achieved a mutually acceptable global settlement and greatly appreciate the constructive approach taken by Chesapeake’s current leadership to resolve this matter.”

Under the settlement, 90 percent of the plaintiffs must agree in writing that they approve of the terms of the agreement by July 11 or Chesapeake and Total have the right to withdraw the offer. Total E&P is a subsidiary of the French oil and gas company Total.

“We are pleased to have reached a mutually acceptable resolution of this legacy issue and look forward to further strengthening our relationships with our royalty owners,” Gordon Pennoyer, director of strategic communications at Chesapeake, said in a written statement.

The $52.5 million settlement follows two decisions by the Supreme Court of Texas – one earlier this year and one in 2015 – that Chesapeake wrongly deducted $1 million in costs from royalty payments it is supposed to pay a Fort Worth family.

In addition, Total agreed two months ago to pay $6 million to settle a similar royalty lawsuit brought by the city of Fort Worth, which also sued Chesapeake. Lawyers involved in the litigation say they expect Chesapeake to settle its part of that litigation soon, too.

The settlement announced Monday does not impact lawsuits filed in March by Young and other lawyers on behalf of land owners in the Eagle Ford Shale who claim that Chesapeake and Chinese National Offshore Oil Company underpaid royalties under lease agreements for wells on approximately 30,000 acres in the Eagle Ford.

The lawsuits claim that Chesapeake and CNOOC breached these lease agreements for several years by improperly deducting costs from royalty payments in contravention of the terms of the leases and failing to pay royalties that are no less than fair market value of the crude oil.

Those cases are pending in the courts of Tarrant County.

Permalink Reply by Gas Boy on May 23, 2016 at 9:37pm

Another company that is notorious for "ripping" royalty owners off is Range Resources.  Retroactive deductions being taken out of present day checks for the same well all the way from 2014.  White collar criminals sums it up.  If you inquiry to Range as to why, all you get back is a white-washed feel-good statement that says nothing and in essence does say to the royalty owner "We Range Resources, We BIG and Mighty - you're nothing but a poor little peon royalty owner.  Now go piss off".  The only way to get through to Range is to sue them.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on May 24, 2016 at 8:42am

Gas Boy,

      Range has a large number of folks on this website who think they are great and will respond negatively when someone tells the truth.

I'm waiting to hear of an honest domestic producer, but I don't think they exist. Look at the people who represent them out in the hills gathering leases as cheaply as possible. That's just the start.

They are thick in our area due to the Free NGLs our State is handing out. Like Chesapeake, they will avoid paying a royalty. Ohio is easy pickins.

There is the RICO Act that will eventually break the bank when applied in court, since Theft By Deception when used on 2 Landowners the first 2 months becomes A Pattern Of Corruption, which is considered a RICO Violation.

Permalink Reply by Frank Walker on May 24, 2016 at 9:13am

Gas Boy

It's not entirely on Range.

In PA at least, that 6-0 Kilmer decision, by our "beloved" PA Supreme court, absolutely destroyed PA landowners.  It was like handing PA gas companies the guillotine to behead us, and encouraging them to do so.

Only Almighty God knows what our Supremes will pull next.  But the Herder Spring decision should finally be handed down this year.  Some of us could lose our mineral rights altogether if that one goes against us. 

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on May 24, 2016 at 8:46am

I'm SHOCKED!

Chesapeake really does steal Billions and pay Millions.

Crime does pay for domestic O&G Companies.

Permalink Reply by Paul Butler on May 24, 2016 at 9:10am

52.50 million dollars is a huge amount of money to steal.

The irony is that the red necks running these companies hold themselves out as law and order, Republicans. 

They are constantly bemoaning crime in minority communities and what it says about the value of the minorities themselves.

In the meantime they are stealing their "partners" and "industry partners" blind.

I'm not even going to mention the "Family Values" they pretend to embrace and their mistresses they actually have.  It should be brought up at their sentencing, but I'm not going to discuss it.

 

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on May 24, 2016 at 10:03am

It's time for the Federal Government to step in with Indictments, dissolve the company and take the profits as is done with any non O&G company that willfully commits a crime.

National Security has been damaged by Chesapeake's actions which isn't a legacy but a business practice that is still in progress across the country.

My fear is that my fellow US Citizens will step in and take action on their own, which will result in normally law abiding citizens becoming criminals while trying to correct this miscarriage of justice. 

Chesapeake is under the influence of money and needs to be stopped before more US Citizens are injured, and JUSTICE FOR ALL becomes a pledge we no longer believe in, similar to RING OF HONOR WRESTLING, everyone is just acting and the outcome has already been decided.

Permalink Reply by bo boboski on May 24, 2016 at 12:08pm

You mean I could rob a bank ,get caught, and only have to pay about 10% of it back?  And not get any jail time? Sounds like a good deal!

Permalink Reply by Joseph-Ohio on May 24, 2016 at 12:31pm

Bo,

Do you think it might have something to do with how much you contributed to those who would rule on such prior to your banking activity ?

Wondering.

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