I received a certified check this week from Chesapeake for shut-in royalty for the Ronald Smith 3H well. The well was drilled a couple years ago but never fracked. The Williams lease date is 4/13/2011, so it passed the initial 5 year term. I'm concerned about cashing the check, being well aware of Chesapeake's shakey practices, and cashing the check would mean that I am in agreement with whatever. My concerns are these:
1. Why am I getting the shut-in royalty check now? The well has basically been shut in for years.
2. Does drilling a well and not fracking it count as a drilled well?
3. Does drilling a well and not producing it count as a drilled well?
4. I could contact Krugliak, but the check isn't for that much and would get ate up by their fees, so I wanted to get some forum comments first.
I would think Bill Williams would answer your question as a courtesy. He wrote the lease so he knows the intent. Read and understand your lease is always good advice.
I know of landowners that Bill answers question for without payment. They typically share the info provided by Bill with me. Bill and I have had a discussion over the phone in the past.
He'll guide you to the best way to recover your future losses.
Chesapeake has a huge number of "Legacy" Issues (HAH!) in progress. They are also known as underpaid Landowners.
Suits to follow. Not if, but when.
Thanks Lynn, Don and Ron for your replies. I have read the lease numerous times...can't say I completely understand it. The lease does say that it will continue in force during the primary term of five years as long as gas and their constituents are produced, etc etc. Then it goes on in the same section to say that it continues in force as long as the lessee is conducting operations as defined in another paragraph. (8 in my case). That paragraph states that drilling is considered an "operation". I'm paraphrasing this as there is much more legal to it...Confusing to me to say the least! I think my best recourse it to call Bill as Ron suggests.