pocket change............

While the natural gas rush in the Marcellus Shale has slowed, claims on that gas continue to shift with Chesapeake Energy Corp. using its natural gas as collateral for borrowing.

The result is a mortgage filed earlier this year, and amended a few times, with the most recent at the end of June, in a staggering amount — up to $10 billion.

It’s likely the most zeros that have ever turned up on a document at the Wyoming County Recorder of Deeds office.

The mortgage also applies to Chesapeake mineral rights in Ohio, Louisiana, and Oklahoma. The massive document has pages listing every lease Chesapeake has in Wyoming County.

Amid collapsing prices of natural gas, the already highly leveraged Chesapeake has been selling assets and trying to build liquidity. Part of that has been accessing credit it needs to survive. Earlier this year, the company noted that creditors reaffirmed the company’s borrowing base, the value of collateralized assets of $4 billion, essentially a borrowing limit.

Chesapeake is trying to ease the minds of nervous creditors, worried about what they are owed while being asked to hand over more money to a shaky entity.

“Chesapeake is trying to tell their creditors ‘we are good for it, and we are going to take care of you,’” said Steven Saunders,

a Scranton energy attorney. “The creditors want to know what their interest is — that’s every single lease getting listed on the mortgage.”

It doesn’t mean much for the leaseholders, however.

Les Greevy, a Williamsport attorney active in the National Association of Royalty Owners, said he doubts the mortgage will significantly impact landowners.

“Chesapeake takes a lease from the landowner in exchange for the right to remove the resource and obligation to pay a royalty,” he said. “If Chesapeake mortgages their interest in property, that does not change the royalty or the relationship.”

Natural gas royalty owners have other real problems. The historically low price of natural gas hasn’t been generating royalties. Mr. Greevy said his last royalty check was 89 cents.

Chesapeake said in March it would not pay royalties for that month because the company lost money on the gas it drew from the earth.

Mr. Saunders expects some angst from landowners, who thought, even if they received a modest lease bonus, that royalties would be the big boon. Instead they’ve been getting pocket change.

“People will see their name on a $10 billion mortgage, shake their heads, and say ‘I won’t see a dime of it,’” he said.

chasgas

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Replies to This Discussion

3p4ekx80ulfbvPermalink Reply by 3p4ekx80ulfbv on July 9, 2016 at 6:22am

Man don't you just hate it when these dirty rotten thieving O&G companies send you a check for several hundred thousand without any warning....those bastards....LMAO....enjoy your windfall my friend....I get the biggest laugh from goofballs who have 2 acres in play who thought their great grandchildren were going to be able to live like the Rockefellers....LMAO....AHAHAHAHAHAHAHAHAHA

Permalink Reply by charles skellett on July 9, 2016 at 8:53am

the point is theft... matters not how many acres you own... regarding your previous point that some signed and now are whining, you also completely missed the point... a contract was signed that didn't end with the rental, ROYALTIES were also to be paid... chessie and others have chosen not to pay the agreed percentage of royalties through varies methods of fraud and to add insult, the courts have rewarded them with fines that are merely a percentage of the true royalties owed... i remember the lawyers explanation of "arms length", chessie's definition is certainly different...

honestly, the lease language you sign is important but when dealing with some of the oil and gas companies, i'm skeptical that you'll get what you agree too... regardless...

chasgas 

3p4ekx80ulfbvPermalink Reply by 3p4ekx80ulfbv on July 9, 2016 at 8:56am

Now the courts are thieves too....everyone is out to get Joe Blow and his 2 acres....you people are NUTS

Permalink Reply by bo boboski on July 9, 2016 at 9:13am

True; on the theft part. I hope Harry ass, or I mean, Danny, has someone come to his house, if he even owns one, and tells him they will give him $10,000 for his car,or tractor,or something he owns, with the deal of $2000. down and $500 per month until its paid for, take the thing, then come up with some cockamaimey reason why they can reduce payments drastically,or quit paying him at all. SAME THING. He puts me in mind of someone who doesn't own any land,or if,so, doesn't have any mineral rights,therefore he has been left out the shale play and any royalties. Thus he is jealous,so he bashes people on here that complain about being cheated by the cheaters.

3p4ekx80ulfbvPermalink Reply by 3p4ekx80ulfbv on July 9, 2016 at 9:18am

C'mon Tarboosh....already told you...I do NOT own ANY land in the play....but I was smart enough to reserve the mineral rights on 186 acres when I sold the ground....between my first 5 year lease bonus, a partial sale of some of my rights AND now a 2nd 5 year renewal I have received almost 1.75 mil and I'm still not in a unit and haven't received a dime yet in royalties...CHK has been DAMNED GOOD to me and my family

Permalink Reply by rmc on July 10, 2016 at 12:42am
That was Danny that told us that not Harry Ash
3p4ekx80ulfbvPermalink Reply by 3p4ekx80ulfbv on July 10, 2016 at 12:44am

My name is Harry

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 9, 2016 at 10:06am

jnm,

     You'll find that even though Carroll & Columbiana County landowners leases have been used as collateral for a loan, the first batch of ALOV leases have not been renewed by Chesapeake. Those leases weren't Released automatically in hopes of a sale later, of leases CHK no longer holds legally.

If anyone cares to see what will happen to them after being leased by Chesapeake, there is plenty of evidence across the nation of how Chesapeake leases, re-interprets the leases then do what they want. Our civilization couldn't exist if the rest of us operated in this manner. Who will step up and file Criminal Charges for this method of operation?

There is no conspiracy, just facts for those who care to read them, from Texas to Pennsylvania.

Permalink Reply by Joseph-Ohio on July 9, 2016 at 9:02pm

Personally, would NEVER call money EARNED on ANY investment 'found'; and that includes ANY money EARNED on ANY investment in Land / Real Estate.

JMHOs.

Permalink Reply by Bluflame on July 9, 2016 at 11:42pm
Hey J-O,
Hadn't seen any comments from you recently. Thought maybe you had embarked on a world cruise on your super yacht using your shale bounty!!!! Good to have you back.
BluFlame
Permalink Reply by Joseph-Ohio on July 10, 2016 at 3:12am

Nope Blu.

None of the above.

Just being quiet.

Great to hear from you as well as always.

Hard to find common ground on much of what's going on these days especially politics and seeming landowner abuses.

Reading / trying to stay informed but not doing much writing.

Also a little busy with things this summer.

Good luck to all of us - thinking we need it.

Notice you haven't been writing much either friend - very unfortunately.

Maybe better days are coming for all of us - what's your read sir ?

Permalink Reply by Joseph-Ohio on July 11, 2016 at 7:59am
Reading your null response as also a 'maybe'.

'Maybe'translates to 'maybe yes' but also 'maybe no' !

We're on the same bus in that case Blu'.

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