Chesapeake and Mortgages: "Subordination of Mortgage"

Question on the landex website they have something called "subordination of mortgage" with the mortgagee list as Chesapeake. I don't have a mortgage so it does not apply to me but I was wondering does this mean chesapeake is buying mortgages?

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Permalink Reply by Henry J. Cittone on April 28, 2011 at 4:08pm

http://en.allexperts.com/q/Oil-Gas-3147/Subordination-Agreements-Di...

 

I think it protects the gas company in the event the land is foreclosed on and the bank ends up owning it..otherwise the lease may be killed.

 

We have a mortgage and chesapeake did not want a subordination, also our bank in tunkhannock said they had never been asked for one by the gas company before.  so I would not worry about it.

Permalink Reply by Prospector on April 29, 2011 at 6:20am
If you do not have a mortage, then NO this would not apply to you.  This statement covers the gas company if a property they lease has a lien (mortgage) on it.  Options they have are, if the lease is enough to pay the mortgage off, they sometimes require the monies involved to do so, or sometimes they just write it in the lease that if the property is foreclosed/bankrupt/etc.... they (the gas co.) still would have the right to satisfy the mortgage and retain the property and/or the rights.
Permalink Reply by Deci Ruiz on April 29, 2011 at 6:30am
Thanks, that is what I thought. It does not apply to me but I'm trying to learn as much as I can about this
Permalink Reply by Prospector on April 29, 2011 at 6:51am

Please feel free to ask anything.  I actually work in the industry and take the honesty and integrity approach, unlike others out there  I really take pride in helping people and landowners, since I myself am one.

Take Care!

Permalink Reply by Jasmine on May 2, 2011 at 10:24pm

Doug, maybe you can answer this question.  Why are the royalities constantly going down down down?  Every month the dollars continue to be lower than the month before. If the gas prices go up, the royalty go down and if the amount of gas pumped goes up the gas price goes down.

 

Some say the Gas companies are adjusting the flow, is this true?

Permalink Reply by Prospector on May 3, 2011 at 6:53am

THere is a drop off of production over time, but it shouldn't be that huge that you notice it all at once.  It will just keep going down bit by bit each month.  There could be a number of reasons your royalty payments have went down, they can adjust the flow rate and cut the amount going into the line back.  What is the quality of your gas?  There are many reasons this could be happening.  If you want, please email me and I can point you in the right direction for more info on this.  I would share it now, but I cannot give out contact info on here.

 

Thanks.

Permalink Reply by Deci Ruiz on May 3, 2011 at 5:25am
Hi Doug ,

Do they drill first then set up the unit or set the unit and then drill?
Permalink Reply by Prospector on May 3, 2011 at 6:50am
The unit will be setup first before drilling is commenced.  However, they can always just drill vertical and NOT hortizontal.  This could allow for them to establish a unit at a later date.  I have not heard of any of this going on, since when they submit for the permit, it has to be known whether or not the well is a vertical or a hortizontal. 
Permalink Reply by bill h on May 3, 2011 at 7:31am
chk in the ne sets up the units well after drilling
Permalink Reply by Deci Ruiz on May 3, 2011 at 7:50am
This is what makes it hard not being near our land WE CAN'T SEE WHAT IS HAPPENING
When we talk to Chesapeake they really don't give out info. It really is wait and see. Soon I hope!!!

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