My big drop in royalty check

I'm leased with Noble Energy. My royalty checks have declined due to the low selling price of gas, but

the checks have been decent. I received my latest check today and was quite shocked, The amount per

acre I received from last months check to the current one went from $118.29 per acre to $4.16. Why the

big drop? The wells have only been producing for 2 years now, so there's plenty of gas left. Did they cut

back on production that much? Has anyone else experienced a drastic decline in royalties. I have no

deductions of any kind taken from my checks by the way.

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Permalink Reply by Zack Jameson on March 30, 2016 at 10:19am

When the royalties show a drastic change, the O&G companies never give a reason or explanation to the leaseholders. They leave it up to us to try and guess what the problem is. 

Permalink Reply by David Allen Lilly on March 30, 2016 at 10:48am

Is it impossible to know if production has been slowed which would result in a royalty payment drop ?

Is there a way to check the production numbers with the state to know if production cutting is the culprit ?

Permalink Reply by Frank Walker on March 30, 2016 at 11:56am

David

There is a way in PA.  Well by well production numbers are submitted to the state and published on the net.  I do not know how other states handle this.

Permalink Reply by David Allen Lilly on March 30, 2016 at 12:14pm

I believe Ohio is the same. I don't want to be a jerk to Zack but I want to know how many minutes he spent trying to verify production for himself before he starts in on the "they are ripping us off" thing. I have noticed a huge drop off in the number of trucks going by here hauling oil out for the gathering facility and now am hearing from that one of the producers is choking back natural gas production.

When we start getting our royalty checks this summer I am making it my job to learn everything I can in deciphering them. Sharing that information, the "how" as much as the "what".

Permalink Reply by INVICTUS on March 30, 2016 at 12:09pm

No, to the second question.

 I've had that specific conversation with Rick Simmers regarding the ODNR auditing the production of the wells.

To clarify, The O/G folks submit production numbers. The state does not audit these numbers.

Political reasons, IMHO. Practical reasons, according to him.

At least I knew where the State of Ohio stood on the issue, whether I liked the answer or not.

I would argue that the state has a compelling obligation to verify the numbers. It is the state who will compel a reluctant landowner to "pool" their land and submit to contract with the producer - ought not the state then assume the duty to at least verify that what is being taken is accounted for (and paid for) correctly? I always felt that this was something like a "taking", to be dealt with under the US Bill of Rights OR the Ohio prohibition on public taking for private use (If that still exists)?

Permalink Reply by David Allen Lilly on March 30, 2016 at 12:24pm

I am sending you a friend request and a private message.

Permalink Reply by Fast on March 30, 2016 at 12:57pm
I agree. I've had several conversations with Rick & the end result.... No accountability. It's the Honor system.
Permalink Reply by LewPa on March 30, 2016 at 2:59pm

Zack,

Here's a thought for you... why don't you read the royalty statements... the volumes are on them... shows you the prices per... if you don't understand them... call your O&G company that your leased to...your either on here bragging or complaining like a teenybobber!

Permalink Reply by INVICTUS on April 8, 2016 at 10:43am

The pipeline folks have renegotiated with CHK, I wonder if this was a reason, all of my royalties have been adjusted upwards since we went into production.

Again, I'm asking...did anyone in the KWGD group see this in their March statements?

I would hope anyone affected by this has also seen some kind of upwards adjustment?

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on March 30, 2016 at 4:40pm

Go to alov.us and take a look at the SURE March 2012 lease, it's 16 pages of landowners protection that more than 2,000 landowners in Ohio in the northern counties signed with Chesapeake. You don't have a better lease.

Chesapeake doesn't read our leases, they do what they want. A well known lawyer told several landowners that Chesapeake pays to the worst lease in the Unit. This months 50 cents per acre supports that. Chesapeake's own marketing company has been taking our well products and now they are saying they overpaid everyone. The farmers believe this story, but the truth is we have never been paid a fair royalty to date.

I heard that a landowner from another shale play state told several people in this area that Chesapeake would pay well at first, then you will end up paying them. That story turned out to be true.

Landowners are being told to wait for the pipelines to go in before they will get paid an oil royalty. The oil is being taken from under every ones noses by tanker trucks. No one has a clue.

In Jefferson County a landowner was told just last week that the 2 pipelines on his land were carrying oil. If you look at the pipelines in Jefferson County, they are coded as Natural Gas and NGLs. There is no oil pipeline. Those in the know who work on the pipeline won't tell the truth about the huge amount of NGLs being removed from wells.

I'm not exaggerating about the theft Ohio has and is experiencing. The news won't carry the story which affects every Citizen of Ohio. Our governor and atty general know what is going and will do nothing to stop the theft.

So, all of you getting a fair royalty are asking me to not ruin it for each of you by telling this same boring story over and over. For each one of you that I "upset" by telling the truth, there are hundreds of landowners who want the truth to be told. People who are too busy milking their cows and farming their land to file complaints with Ohio's government departments.

Keep the landowners of PA in mind when you count your royalty dollars, they have been stolen from severely, from as far back as 2010. Keep your fingers crossed and hope you are treated fairly, but the odds are against you.

I know the type of people you are, I worked with them at one time. Why are you dragging me into this? they would ask. My answer was "Because you know the truth". Well my friends these days no one cares about the truth, as long as they keep their job or that royalty money comes rolling in.

My 2.5 acres of theft by Chesapeake won't break the bank, so why should I care if you loose a couple hundred acres of royalties? Maybe it's because if someone steals from you and the state doesn't care, I see it as theft against all Citizens, me included.

The Oil & Gas companies know they can steal from you and you won't even know it.

You are witnessing the largest theft against Ohio in it's history. You will all end up paying more taxes to cover the losses when the states infrastructure becomes and issue, exactly as PA is experiencing now. The governor can go back to his home state of PA after he fleeces Ohio.

Before I go back to my home state, I'd like to do what the governor claims "Always leave a place you have been better than you found it". 

You all will eventually come to realize that you should have cared more about your neighbors and fellow Citizens, and less about yourselves.

Permalink Reply by Zack Jameson on March 31, 2016 at 1:13am

Ron Hale....I believe every word you are saying. I share the same sentiments as you do about the "industry". I've experienced many of their shady practices. Most landowners are thrilled to be getting their easy money, dubious to the fact that they are being stolen from. I agree with everything you say, Ron.

Permalink Reply by David Allen Lilly on March 31, 2016 at 2:59am

Well, Ron may or may not be correct in everything he contends, but his blanket statements and hearsay are not helping his cause with some of us.

I have to deal in what can be verified, and I cannot verify "someone told a guy that oil is in the pipeline" or whatever.

It isn't anything personal but generalities unsubstantiated and second hand rumors don't help.

Nor does jumping to the conclusion that you are being stolen from without verifying production numbers against your shrinking royalty checks.

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