CHK deduction for NGLs

I'm seeing this for CHK units from the Putnam and Garner well pads. I'd be interested to know if anyone is seeing it from non-CHK operators.

A message from Brian Werner to all members of Carroll County, OH on GoMarcellusShale.com: Discussing the Marcellus & Utica!

I am in the Morsheiser 5H well in western Carroll County Ohio. Over the past year the NGLs have gone from being sold to being something that CHK is paying to get rid of. Over the last three months, the cost of getting rid of them is climbing exponentially (-$.29/gal in June). This almost offsets the price that they are selling the gas for and a with the current trend I am expecting the cost to get rid of NGLs to exceed the income from the gas sales next month. In June CHK netted only $.18/ MCF when the gas and NGL sales were combined. Is this going on with everyone in Carroll county, or just the Morsheiser 5H well? The Morsheiser 10H well is also in production from the same pad, and I'm wondering are those land owners seeing a similar cost?
Enervest's Cairn 5H well unit almost abuts the Morsheiser 5H unit but they are continuing to sell their products profitably at market rates. CHK is selling gas at lower prices than Enervest to begin with, so that just makes the negative NGL sales hurt even worse.

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Replies to This Discussion

Permalink Reply by Robert Bond on September 10, 2015 at 7:06am

You might want to post this on the regular board so people in other places will be watching out for this.

Permalink Reply by Mike h on September 10, 2015 at 7:08am

Good point Robert.

Permalink Reply by Robert Bond on September 10, 2015 at 7:20am

I am not in Carroll county or leased with CHK but would hate to see this spread.  The more that  know about it the better.

Permalink Reply by Mike h on September 10, 2015 at 7:34am

I'm wondering if this violates the terms of the SURE and ALOV leases which require payment on the gross at the wellhead with no deductions.

Permalink Reply by Tree Farmer on September 10, 2015 at 8:28am

Landowners have been getting the shaft from companies like CHK since The Drake Well. I have to laugh because the alternative could get ugly. This is not new; they are corrupt, lying, cheating, rat bastards and anyone who has held oil well(s) property for a few decades knows this. The state is impotent and overworked and will not help you. I told them about my proof of a double set of books and they told me to hire an attorney. Sure, that is going to happen, not without a huge retainer to hire a team of forensic accountants.

Keep posting what you find, exposing them is likely our only recourse...

Permalink Reply by Larry Livengood on September 14, 2015 at 9:47am

Tree Farmer, You are being too kind and nice concerning your evaluation of CHK. I have a no deduction lease, no shared costs, at well head price and last check they took 60% of the royalties as fees. They say the same, Get an attorney. They are also selling at below market, so they are screwing me at both ends.

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