Jamestown resources

Does any one know how Jamestown resources is involved with cheasapeake , juts checked my landex site and it shows them on an oil lease assignment,, thanks for any info,,,

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Permalink Reply by Andrea Richlin on October 15, 2013 at 4:13am

Jamestown resources is an affilliate company owned by Aubrey McClendon

http://pipeline.post-gazette.com/index.php/news/investigations/2441...

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on October 15, 2013 at 4:17am
Aubrey was given A working interest on every well CHK drilled. Jamestown Resources was the company that held that WI. This arrangement was one of the many reasons he was shown the door by shareholders.
Permalink Reply by Frank Nesmith on October 15, 2013 at 4:19pm

Aubrey got 2.5% each Chesapeake well. If Jamestown Resources is involved, beware! In order to get his 2.5%, he has to pony up 2.5% of the costs of each well. To do that, he uses Jamestown Resources to take loans out, mostly from EIG, to put up his share of the drilling costs. That means he uses your land and anyone in the drilling unit for collateral and takes an "open ended mortgage" out on your land. 

That only becomes a problem if you want to take a first or second mortgage out on the property while he has a mortgage on it, or if you want to divide or sell your property. 

Permalink Reply by Judy McDaniel on October 15, 2013 at 5:02pm

How can Aubrey take out a mortgage on land that is not his?

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on October 16, 2013 at 2:53am
He's not mortgaging the land, he's mortgaging his percentage of a recoverable asset from the land. Many operators use open ended mortgages and revolving lines of credit to finance drilling operations since there is no cash flow coming from an oil and gas field that has yet to be drilled.
Permalink Reply by Judy McDaniel on October 16, 2013 at 2:55pm

Thanks for the reply. How would that be a problem if you wanted to take out a mortgage or sell your property?

Permalink Reply by Frank Nesmith on October 17, 2013 at 1:01am

The loan is recorded as an "open ended mortgage" in the county Recorder of Deeds office. EIG MANAGEMENT COMPANY, LLC is the company he gets the loans from. How does that affect your property. If you want to take out a mortgage or sell your land, the loan is recorded in the county office. If there is an open ended mortgage on your land, then the bank will not want to loan money on it for either purpose. They are not going to lend money on land that is already mortgaged to the max.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on October 17, 2013 at 3:08am
Technically that's probably correct, but most lenders differentiate between mortgages held by unaffiliated third parties for oil and gas and direct mortgages by landowners/homeowners. I think it depends on a number of factors that we don't know, i.e. landowners credit status, outstanding obligations, etc.
Permalink Reply by Judy McDaniel on October 17, 2013 at 3:18pm

Thanks for the info, I had no idea that these oil and gas mortgages could be take out and how it could effect the land owner. Are these oil and gas mortgages taken out often?

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