Replies to This Discussion

Permalink Reply by 0ym9x5ag7ury2 on October 14, 2015 at 12:05pm

Thanks to OPEC Chesapeake is on their way out of the Appalachian Basin, even with the free NGLs they are still producing without a royalty.

I do hope they stick around long enough to be hammered by the next round of lawsuits though.

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Permalink Reply by sircedric on October 14, 2015 at 11:54pm

You got that right Ron. We have an enhancenent clause. So sign the lawsuit and then they will only take out 72.5%. 1% is illegal. So we wait some more. Life goes on.

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Permalink Reply by Joseph-Ohio on October 15, 2015 at 12:22am

Wondering if there would be anything at all left of your pro-rata share of royalty after paying your pro-rata share of the 72.5% post production / market enhancement costs ?

Why would law (the magistrate / judge) allow such a 'settlement' to be presented recognizing lease terms are apparently not being honored but rather ignored / violated ?

Why wouldn't such a proposal be viewed as 'frivolous' / a blatant violation of the leasehold agreement / contract ?

Only reason I can come up with would be that the magistrate / judge views the 'enhancement clause(s)' as permissive and over-rules / takes precedence over the 'no deductions' clause(s).

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Permalink Reply by Sherre Boyanowski on October 16, 2015 at 3:32am

Thank you. I'm glad that somebody else gets what is going on with this case. Don't forget, the lawyers get a cut -30%- going forward for the next 3 years!

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Permalink Reply by james mcmeechan on October 17, 2015 at 12:09am

   The class action settlement states on page 2, paragraph B "further allege that Chesapeake used below-market sales prices to calculate royalty payments". I do not see the price for the gas sold at below market price addressed anywhere in the settlement. Did I miss it, or was this suit not also about the price paid for the gas? It seems the price paid could be worth more than the deductions.

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Permalink Reply by Joseph-Ohio on October 17, 2015 at 12:33am

The way I would interpret it would be that all past tresspasses would be forgiven (by acceptance of the settlement's terms) - wouldn't anyone ?

One question in my mind (related to your very astute observation) and one I would ask; would be if by accepting the terms of the settlement, would the lessor also be agreeing to be paid royalty on the basis of 'below market prices' going forward ?

I wonder.

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Permalink Reply by james mcmeechan on October 17, 2015 at 2:15am

  By accepting the settlement you will dismiss with prejudice all claims in the original suit. If one of the claims was Chesapeake was selling the gas at below market prices, you would not be allowed to litigate those claims again. If I hired an attorney to recover losses because of deductions and sales at below market prices, and he came up with this settlement, I would find a new attorney.

  Every day thousand of cases are tried in courts throughout the United States. Each case has at least two attorneys, one for one against,  The only outcome that is certain, is that 50% of the attorneys will lose. Chose your representative wisely.

Permalink Reply by Joseph-Ohio on October 17, 2015 at 4:15am

James,

What about going forward ?

Would more 'below market prices' be used to calculate royalty payouts ?

Would there be another lawsuit waiting in the wings based on the 'settlement precedent' established in the 1st ?

Never ending litigation / more 'legal fodder' ?

I wonder.

Permalink Reply by Joseph-Ohio on October 17, 2015 at 10:04pm

Looked up the legal prase 'dismiss with prejudice' and found the following Wikipedia definition :

"The inverse phrase is dismissal with prejudice, in which the plaintiff is barred from filing another case on the same claim. Dismissal with prejudice is a final judgment and the case becomes res judicata on the claims that were or could have been brought in it; dismissal without prejudice is not."

That doesn't answer my question of what would happen if the same behavior(s) that the original argument was about, occurred again (in the future, after accepting the 'settlement terms' of the 1st instance) - but guessing it would establish precedent; and if additional instances ended up in additional arguments / legal embroilments, that the outcome would be the same as in the 1st instance.

Just my guesses / thoughts on it as I try to understand what's happening here.

Good luck to all of us as I still think we all need it.

Permalink Reply by Joseph-Ohio on October 18, 2015 at 7:12pm

Queried the internet for a meaning of the words (Latin I guess) 'Res Judicata' and came up with the following explanation :

Res Judicata : 'a matter that has been adjudicated by a competent court and may not be pursued further by the same parties.'

So my head tells me that if they (the lessee) were actually using 'below market prices' to calculate royalty payouts to lessors; and any lessor and the lessee 'settled' on that method; that if the lessee continued using that method going forward (after 'settlement', and why wouldn't they ?) that the lessor couldn't re-litigate as that feature of the argument was determined and settled upon becoming the 'final judgement' and described as 'Res Judicata'.

My take : not good / wouldn't 'settle' risking the behaviors to continue subsequent.

But that's only me (a neighbor / hopeful future lessor, with no involvement in this specific instance'; other than concerns affecting potential future). So - not my call to make.

Good luck to all of us as I think we need it.

Permalink Reply by Billy Park Whyde on October 19, 2015 at 3:39am

Thts is what

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Permalink Reply by Joseph-Ohio on October 19, 2015 at 3:40pm

I get it BPW.

Thx.

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