"Ward: Gas company financing is preventing residents from getting mortgages"

"Chesapeake Energy Corp. recently mortgaged the mineral rights on over 1,000 properties in Bradford County, which in at least a couple of cases has prevented property owners from taking out a mortgage on their homes, a former Standing Stone secretary/treasurer said. ...

"As part of the mineral-leasing process, Chesapeake takes ownership of a percentage of the mineral rights. As the owner, Chesapeake has the legal right to mortgage its leased interest in the minerals," Grove [Chesapeake spokesman] said.  ..."

http://thedailyreview.com/news/ward-gas-company-financing-is-preven...

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Otoh, in Michigan (and Texas), Chesapeake is using landowner mortgages as the justification to reject landowner-signed leases.

"Chesapeake Cries Foul: Energy Company Will Fight Lawsuits

Hundreds of northern Michigan landowners intend to sue Chesapeake and its affiliated subsidiaries in the coming weeks over canceled mineral leases. Petoskey attorney Steve Barney said the company has no legal requirement to honor all of the leases, particularly those for properties with existing mortgages.

“Payment and lease execution is based on clear land title,” Barney said. ..."

http://www.morningstarpublishing.com/articles/2011/02/23/leader_and...

Views: 189

Replies to This Discussion

Permalink Reply by Ann Ticopa on August 1, 2011 at 10:15am

One person commenting on the Towanda Daily Review article said he had heard that East had done the same thing in Tioga County.  

From Landex:

Instrument #:    201001881
Recorded Date:    FEB 22, 2010  04:03:31 PM
Instrument Type:    MORTGAGE
County:    TIOGA
Municipality:    JACKSON TOWNSHIP
Recording Status:    VERIFIED
Book:   
Page:   
Total Pages:    33
Parcel Numbers:    N/A
...
Notes:    REF OGLEASE 740 4223 200008356 ET AL
MORTGAGOR   
EAST RESOURCES INC
MORTGAGEE   
JPMORGAN CHASE BANK N A

 

 

 

 

Permalink Reply by Brian V. on August 1, 2011 at 4:14pm
I glanced at the Mortgage you listed and it appears that it was taken out on drilled unitized acreage for the most part. I'd really like to know why this hasn't been satisfied since East sold it's interests and it seems they could satisfy these loans with a portion of what they received from Shell. Then again I know nothing about business at this level. 
Permalink Reply by Ann Ticopa on August 1, 2011 at 6:02pm

Does the mortgage include the names of the properties/units that ERI mortgaged?

 

What I don't understand is why the leases aren't used as collateral rather than mortgages. 

Permalink Reply by paleface on August 2, 2011 at 12:30am
 My guess would be Shell assumed East's loans and mortgage's when they bought the lease's.There would have to be some type of written agreement between East and Shell.
Permalink Reply by Ann Ticopa on August 3, 2011 at 2:20am

Followup:

"Local bank officials: Chesapeake's mortgaging of mineral rights won't affect homeowners' applications for mortgages"
http://thedailyreview.com/news/local-bank-officials-chesapeake-s-mo...

 

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