Any one get this letter with your check ?

 I recieved a letter from cheif oil and gas with my check.

Successful oil and gas drilling and development of the marcellus shale in the counties of northeast Pennsylvania has resulted in a significant   regional over-supply of natural gas-exceeding both the requirements 

of available markets for purchasing the gas as well as the available 

Capacity of available pipe lines to transport the gas to more distent markets. THIS SITUATION HAS SERIOUSLY IMPACTED TO THE DOWNSIDE THE PURCHASE PRICE BEING OFFERED  FOR NATURAL GAS IN  THE REGION. THIS HAS BEEN PATRTICULARLY EVIDENT BEGINNING

IN THE MID-SUMMER AND CONTINUES TO THIS DATE.

CONTINUING TO PRODUCE NATURAL GAS WELLS AT MAXIMUM FLOW RATES INTO THIS ECONOMIC SITUATION WOULD ONLY EXACERBATE THE NEGATIVE CONDITIONS. CHEIF HAS CHOSEN TO REDUCE THE FLOW

RATES FROM IT'S NATURAL GAS WELLS AWAITING MORE RECEPTIVE 

MARKET CONDITIONS . AS A RESULT OF THIS ACTION YOU WILL NOTICE 

ON YOUR ROALTY STATEMENTS THAT THE VOLUMES OF GAS PRODUCED AND SOLD FROM THOSE WELLS AND, CONSEQUENTLY, THE 

REVENUES BEING PAID TO YOU ARE ALL AT THE LEVELS YOU HAVE EXUBERANCED IN THE PAST.

CHIEF IS CONTINUOUSLY MONITORING THE SITUATION AND WILL RETURN ITS NATURAL GAS WELLS TO MAXIMUM FLOW RATES CONSISTENT WITH AVAILABLE PIPELINE CAPACITY TO TRANSPORT THE GAS IF AND WHEN REGIONAL GAS MARKET CONDITIONS APPROVE .

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0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on November 6, 2014 at 1:29pm

CJ,

      I don't see a letter, link, or attachment. Did you forget something?

Permalink Reply by cj wyalusing on November 6, 2014 at 2:01pm

It shoud have came through cj

Permalink Reply by Joseph-Ohio on November 6, 2014 at 3:16pm
More natural gas than can be sold or even taken away / moved.

To me, amazing - and especially so considering a few years ago running out was the perceived major issue and importing natural gas at a premium was being contemplated.

I'm happy to read no claims that the wells are poor / unable to produce / unable to match demand.

I think we need an intervention to utilize more domestically across the board - public and private transportation / freight / power generation.

IMHO.
Permalink Reply by Frank Walker on November 7, 2014 at 1:22am

Hi CJ

I don't know for certain where you are, and can only judge by your screen name.

But for the SE Bradford/SW Susquehanna region of Pennsylvania I believe the letter's message is truthful.  As compared with what is needed there, the takeaway stinks.  This is being worked on vigorously, but a solution is not right around the corner.

At least as surprising for me as the letter's message, is that you continue to receive your royalties by snail-mailed check, and not by direct deposit.  Now that's amazing!!

Permalink Reply by cj wyalusing on November 7, 2014 at 1:36am

 Frank your right  about the check deposit they didn't offer it 6 months ago i hate to see how much more they will take out if the build more lines! This month 46 percent  enhancement fees . 

Permalink Reply by Frank Walker on November 7, 2014 at 1:53am

CJ I'm sorry for your loss.  That is truly an obscene deduction from your royalties.  What's happening to you is unconscionable, at least in my view.

Still, I appreciate your post very much.  It is instructive for me to learn Chief is doing this to their Lessors.  I had (wrongly) imagined only Chesapeake was that bad.

There is so very much gas in SE Bradford, but also far too much difficulty and unfairness for Lessors there. 

Permalink Reply by Joseph-Ohio on November 7, 2014 at 2:30am
Trying to get an overview on all of this and unfortunately keep coming up with the same conclusions.

It seems to me too many times that the Gas and Oil lessees secure the asset via leasehold and then look for ways to not have to pay the lessors - sometimes built into the lease agreement and sometimes not.

How often, what percentage of the time does this manifest itself I wonder ?

Is this the norm or are these isolated cases I wonder ?

Judging by what I've been reading here it seems to be the trend but don't know for sure.

Even after leasing you write that deductions take 46% of your royalty payments. I agree with Frank of course that this is an oppressive amount to be certain.

For info. we're still not leased in northeast Ohio (southeast quadrant of Ashtabula County) and trying to keep out of such goings on.

Wondering if it's possible ?
Permalink Reply by Frank Walker on November 7, 2014 at 3:26am

Yes, Joseph, of course it is possible.  It might even be to your benefit if you play your cards right!!

But:

When they get to the point of developing the unit your land otherwise would be in, then that's time to reconsider pronto.  If drilling is going to take place with you or without you, then you need to opt in without further delay.

Otherwise:

"No royalties for you!"

Course there are a gazillion other considerations.  To cite, from among many, just one example:

If you want to guard against having a well on your land, you would need to insist on a NSD (non surface development) lease.  

Permalink Reply by Joseph-Ohio on November 7, 2014 at 3:57am
To Frank Walker,

For info. we've been waiting for attention in the north for a long time.

These days, with us, it's all negotiable.

When leasing resumes however we'd like to stay out of trouble.

For more info., we're sure we could even find a place for a well pad if a few other details could be worked out.

Pipeline Right of Way also negotiable.

It's basically all negotiable with us.

Thanks for your reply here.

BTW - having trouble with the reply and edit buttons on GMS today and on any of my devices - desktop / notebook / mobile - basically the reply and edit buttons don't work ! How about yours ? That's why I could only answer you with a new reply. Wrote a PM to Keith and also left a comment about the difficulties with him on his page looking for a little help.

Good luck to CJ ironing all his difficulties out - seems like he's got some real headaches.
Permalink Reply by Joseph-Ohio on November 7, 2014 at 12:46pm

Seems like my computer is all better now.

I'll tell Keith.

 

 

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