My big drop in royalty check
I'm leased with Noble Energy. My royalty checks have declined due to the low selling price of gas, but
the checks have been decent. I received my latest check today and was quite shocked, The amount per
acre I received from last months check to the current one went from $118.29 per acre to $4.16. Why the
big drop? The wells have only been producing for 2 years now, so there's plenty of gas left. Did they cut
back on production that much? Has anyone else experienced a drastic decline in royalties. I have no
deductions of any kind taken from my checks by the way.
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Replies to This Discussion
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Permalink Reply by G.H. on
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Prepare for Ron Hale deluge regardless of your assertion that you have no deductions :)
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Permalink Reply by 0ym9x5ag7ury2 on
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GH,
I bet you haven't been stolen from yet. Or are you an O&G employee?
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Permalink Reply by G.H. on
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Other people on here have reported not being stolen from as well. I can only hope for my sake that you are wrong about "yet."
I have said on here many times that I understand your frustration, and I hope to never have to deal with it myself. I also respect the clear amount of effort you have put into fighting a problem that every oil and gas owner should be concerned with, even if it may not be happening to them at the moment. You have also put in a fair amount of time trying to educate others, which I also think is respectable and very useful for this community.
However, it gets old when you hijack every thread (even totally unrelated ones) on here to make them all about yourself and your problem. I would like to see it kept to relevant threads, is all.
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Permalink Reply by JK on
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GH,
I for one am glad Ron Hale is paying attention and sharing his findings with us.
You do not seem to add much other than your position.
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Zack,
Ohio Farmers are now getting no royalty in Carroll County and more than likely the rest of the state. Chesapeake Energy Marketing found an error in their bogus royalty payout, and Chesapeake is going back and recovering the small percentage they shared with the mineral owners.
They sent me the 50 cents an acre for Buck Well 1H because they have me in a new unit by 0.6 acres and chose to pay me a fraction of a percent for what they are actually taking out of the Paige 5H well. The fact they are only paying 2 landowners in the unit has significantly reduced their Operating Costs.
Those O&G ceos are nothing less than geniuses with the ability to negotiate huge sums for their company. I see them negotiating with the prison guard in the near future for extra time in the law library and a night light in their cell so they can see when the True Negotiators show up to pay them a visit for shorting royalties to Mom and Pops family farm.
Pay backs come in many forms, a conviction is just the start.
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Permalink Reply by David Allen Lilly on
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"Ohio Farmers are now getting no royalty in Carroll County and more than likely the rest of the state."
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Although extremely sympathetic to your plight and willing to give you the benefit of the doubt in most cases, this is where you get into trouble.
There are many, most even, of the folks around here in Guernsey county who are receiving royalties, you just never hear from them because there is nothing to complain about. I know we are dealing with companies that are not to be blindly trusted but it is to easy to lump every royalty difficulty into the "stolen royalty" category.
I strongly suspect that the vast majority of the theft claims arise from leases which are extremely advantageous to the producers, leases which should have not been signed in the first place. I know that sounds cruel and un-caring but it isn't meant that way.
I also suspect strongly that the low commodity prices are forcing companies to everything they can to lower royalty payments because the alternative is bankruptcy, if you think this is bad then consider what that scenario means. I have seen this before, a company continues to collect revenue KNOWING they are fiscally insolvent for as long as they can and then what you are owed becomes part of the bankruptcy process which means you will never recover any of your legally entitled to funds.
This entire matter is ugly, the business is rife with cheats ands liars, inside an out, as well there are a very sad number of ill-informed folks who have made detrimental decisions they cannot get out from under.
Still, we are in it now and the worst part other than the fact that we have not stuck together very well in the very generalized information shared with others, especially in regards to royalty earnings, information lacking in matters of lease terms and production quantities which would make some comments far too long and complicated to digest.
I am very desirous not so much to hear the horror stories but to hear the solutions, how landowners were able to verify their royalty shortages and then receive satisfactory compensation for them. That is the direction we need to take, union and solution.
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Permalink Reply by G.H. on
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I agree with this post 100%. You can't take your situation and say that it absolutely applies statewide, whether you are happy or unhappy with your situation. Certainly many companies are taking excessive deductions because they're in dire straits financially. But I would also guess this is more common in the landowner-unfriendly leases. Some companies are probably just curtailing production and waiting for better prices, and some people probably mistake this for being stolen from. And yes, you won't hear from many of the people who are happy with their royalties.
I am also definitely interested in hearing about solutions to royalty shortage problems.
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Permalink Reply by Robert F Kramer on
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Ron
I am also in Carroll County, the Hawk North. I didn't get any statement for Feb or March. I e-mailed CHK and they replied that due to a "purchaser price/volume adjustment" they have to "recoup" the amount I was over paid. If they taking any product from the well, I think I should still get a statement to show what they are doing.
Bob K
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Bob,
Chesapeake's purchaser is Chesapeake Energy Marketing Inc (They recently changed their name, probably so they can say I'm wrong). They have never paid fair market value for Ohio's well products, and they have probably never purchased our products, just taken the underreported inventory. Is this an Arms Length Transaction at Fair Market Value that most of our leases call for? You know it isn't.
Bruce Buck called Chesapeake's Revenue Department to discuss this latest royalty underpayment FRAUD. They avoided mentioning that CEMI was the company that over paid us, trying to make Bruce think there was actually a sale.
Bruce called their bluff and they admitted it was CEMI that purchased the well products.
They do put Multimillionaires in Prison, right? There's one on Chesapeake board of directors. I think that Ohio landowners should share his holdings or estate if he pulls an Aubrey when he is indicted.
He knows what Chesapeake is doing that makes him a co-conspirator per the law.
As far as your well volume, we may never know. Producers have supposedly throttled back, and their Honor System reporting to ODNR is probably under reported. The ODNR says they produced more well products in 2015 than any other year in which records have been kept. So if producers throttled back, where did the products come from?
Could it be some kind of miracle? Not from Heaven I'm sure. Hell? Probably.
Keep an eye on the Hope Christian Fellowship vs Chesapeake Energy Complaint it's going to be HUUUGGE!
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Permalink Reply by Bill F. on
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many people in NEPA have been screwed out of royalies by Chesapeake .there are 2 or more cases sueing now ...good luck one is over 2 yrs the other is close to that ...taking them to court is a long process.
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Permalink Reply by txgeo on -
Probably a combination of depressed prices and throttled production. Between Feb 1 and March 1, nat gas prices dropped almost 50%. Couple that with decreased production and it may account for those changes. But I'd be sure to carefully compare your most recent statement for any changes.
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