Royalties...finally

Finally started getting our royalty checks from Chesapeake and Stat Oil. I was a member here before but nothing was happening with our property and all everyone was offering was conjecture and hearsay. The checks we have gotten from our well in Bradford county are really not that good. We must have gotten an average production well. We have 15 acres in two units and the on that is producing is about 9 acres and the total checks between the two oil companies total about $1500 dollars for three months of production. The gas prices they sold the gas out was well below the well head price that you see on tv or on Marcellus shale forum. The gas was sold for over $1.50 less than you see everywhere and the amount chespaeake takes out for production is between 34-38 per cent which is ridiculous. Hopefully, the price of gas will rise in the future to give us a little more in royalties. Just wanted to post this because when I was a member before was kind of upset that no one would say what they were getting and told myself when i received royalties I would share the info. Really thought we would be in for a windfall but I guess it all depends on the output of the well and the thing is we only have one well drilled on the pad and it doesn't look like more wells will be drilled in the near future. Just have to hope the other unit I am a part of will produce better. If any one has any questions feel free to ask. Thanks

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Permalink Reply by Gary Citro on December 4, 2012 at 11:36am

>The old Philips leases did not include Marcellus shale access and East sent a letter out to all those people asking them to allow the Marcellus to be drilled. Not a single person declined but us. Everyone gave away their rights without a fight. That all happened a couple of years before Shell picked East up./p>

Ugh...that is EXACTLY what happened to me (giving up my rights) which makes you at least 3K richer and smarter than I am.
I only have 1.5 acres in a unit, and I often wonder whether it's even worth poring through the legal docs and these message boards. But theoretically at least, there is at least a *potential* of my property taxes being paid off and then some when the darned thing produces, especially if it goes to all the laterals.

Permalink Reply by Barbara on December 4, 2012 at 12:37pm

no big upfront here....offered $750/acre...told last offer as CHK was not going to lease anymore; under great emotional duress from family tragedy, i folded........and took it.  all around me had at least $2500/acre.  my story not as sad as those who 'settled ' for $5 or so......................................for sure.

Permalink Reply by JK on December 1, 2012 at 12:32pm

We have old leases and were told CHK pays for production 3 months later.

Royalty rate is 12.5%

Since 2008 royalties have gone down from $10k+ to $1k a month.

One reason is CHK is only letting the wells run for 3 hours a day.

Recently the well tender told me Dominion Hope is putting governors on all the wells to not allow high pressure to go over 300psi.

Mon. county, WV

 

Permalink Reply by James T Monyak on December 1, 2012 at 1:23pm

JK,

How many acres do you own in the unit? How many acres are in the unit and how many wells are in the unit?  I heard CHK didn't deduct marketing cost in 2008. Besides the decline curve reducing your checks maybe they are deducting marketing cost now.

Permalink Reply by JK on December 1, 2012 at 1:33pm

JTM,

1240 acres with 4 wells left out of 8.

I don't know all they are deducting frankly.

These are good wells.

4 years ago they re-fracked them and drilled even deeper.

The problem is in the allowed time for the gas to run.

I check these wells often and most times they are not 'on'.

I questioned CHK about this and was told there is too much gas.

So we are stuck.

Sorry but I don't have my statement in front of me to tell you what the deductions are.

Permalink Reply by jonathan M. on December 1, 2012 at 3:55pm
Jk,

You own 1240 acres in 4 units is that correct? So at the peak you were receiving less than 100/acre per month? Thanks for info
Permalink Reply by JK on December 1, 2012 at 4:07pm

JM,

Prior to 2008 the royalties were much more.

I just used 2008 as the point of when the downward spiral began.

Permalink Reply by jonathan M. on December 1, 2012 at 4:22pm
Gotcha. Appreciate it. Nice to get feedback from someone actually receiving royalties. Thanks
Permalink Reply by James T Monyak on December 1, 2012 at 5:08pm

It sounds like you have vertical wells and they don't have pipeline that is sufficient to handle the volume of natural gas.  This make sense your wells were drilled in 2008.  The good news is that you will receive alot of money in the future.  The bad news is will take some time before that happens.  You are HBP now and your property will not be a priority for adding a hortizontal well. 

Permalink Reply by JK on December 4, 2012 at 10:12am

jonathan, We are not in a unit as we own the whole 1240 acres.

We just have 4 wells not operating at full capacity because of whatever reason CHK says.

Permalink Reply by Tico on December 1, 2012 at 1:24pm
Are you saying that Chesapeake paid back production costs or they said they did,,
Permalink Reply by James T Monyak on December 1, 2012 at 1:30pm

I didn't say anything about "paid back production costs."  I said they "didn't deduct marketing cost" 

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