Lease/Royalty Monies

Hi all!   We recently got a check from Chesapeake for the signing bonus per acre thing. The amount is exactly 1/2, or half of what we signed the lease for.  We have a "Fee Simple" deed, which means to me that there are no liens or any other prior commitments to the deed. Why would "gas co." only come up with half. And what would happen to the 18% royalties, would that be halved as well? Has anyone run up against this?

Thanks!!!

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Replies to This Discussion

Permalink Reply by G S Gass on January 20, 2011 at 11:13am

Richard, It appears CHK performed due diligence, ran your title and found a reservation of 1/2 interest.  The payment order allows adjustment of bonus consideration to account for net acreage.  CHK and the other exploration companies run title back to mid 1800s, whereas title abstract companies go back 40+ years to satisfy bank mortgage requirements.  Royalties will be adjusted proportionately.

Good luck,

GSG

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