All neighbors are pooled, CHK left us out!

Sorry if this gets too long... but we're really upset!  We own 10 acres in Fox Township in Carroll County, OH.  5 years ago we leased with CHK at $1500 per acre, can't remember the royalty percent.  The past couple of years, they drilled to our west (less then a half mile away) and didn't include us in the pool.  They have another pad planned for our neighbor to the north, and his land's lease got extended over the winter.  Our lease was up in February and when I called CHK because I hadn't seen any check or renewal, I find out they aren't extending our lease.  Some more digging, I find out the EVERY ONE of our neighbors, on ALL SIDES of us are currently collecting royalties from other CHK wells, including the guy to our north who will eventually get his own rig (they pooled that one last Fall and left us out, even though we were leased.)  We aren't included in any of them.  Since we are completely surrounded by CHK, and they are draining everything around us, it makes our small 10 acre plot of minerals worthless.  Do we have any recourse?  Should we talk to a lawyer?

I called CHK and they are going to send out a release of our minerals, which is nice, but I'm waiting for a call back from Brandon the landman, who I'm sure will have some excuse of why everyone else got in the pool except for us.  HELP everyone, what should we do?

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Permalink Reply by bo boboski on June 26, 2016 at 9:01am

I feel for ya, but it'll be hard to prove.And they know that!

Permalink Reply by dave smith on June 26, 2016 at 2:18am

 CHK is probably under your land. They are crooked as they com

Permalink Reply by Robin on June 26, 2016 at 6:48am

About

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on June 26, 2016 at 5:01pm

James,

     I just met a Columbiana County landowner who had a vertical well on his neighbors property and this person had signed a lease for a vertical well also, which expired before 2011 due to no drilling.

The producer he mentioned as being leased to for a short time, has his name on several documents, leasing this land he doesn't own to Chesapeake without his signature. I looked this information up using his name and there are 6 documents in the Columbiana County Recorder Office from 2012 that the landowner knows nothing about. The landowner is not collecting royalties.

I was able to print the index but I can't open documents in Columbiana County. I believe they want us to show up in person so we can pay for each page needed to be Xeroxed rather than allowing us to see the documents on line.

Carroll County on line records can be opened, read and printed. 

I'm betting this is going to affect several landowners since there are 3 or more families mentioned on these documents.

I suggest you go to the on line Carroll County Records and do a search on your name to determine if someone else holds your lease and is collecting your royalties. 

Oil & Gas companies don't like to let go of properties, and have been known to take actions that are illegal hoping no one will ever catch on to what happened.

With Ohio attorney generals office claiming the laws of Ohio don't apply to Oil & Gas companies, they may be thinking this is open season on Ohio Citizens since theft is now a Civil Matter not a Criminal Matter, at least that's what is being said by all departments of Ohio when a landowner calls in to report an O&G theft of their royalties. 

I called the landowner and left a message on his phone, he's not aware of what has happened, but I will be giving him the printed index and sending him to the Court House to get copies for his future lawyer.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on June 26, 2016 at 5:21pm

You can take this issue up with the ODNR to see if Chesapeake has violated any laws by doing this.

The ODNR does have laws that were meant to ensure all landowners are given the opportunity to have their minerals produced without being treated unfairly or making it difficult to have their minerals produced.

I wrote a letter to the Director ODNR on this topic when Chesapeake started using very odd shaped units and modifying distances from the laterals to ensure I wouldn't be produced. At the time I had denied a seismic genius the opportunity to set off charges in the Spring, on my land and destroy the water paths under ground in the shale. My neighbor didn't think of this possibility, now he has to put in tile to drain the water that comes to the surface of his land, over to my creek at the border of our property. 

So now that I have a lawsuit against Chesapeake, I'm sure they will continue playing with me. If I had done nothing to upset them, Chesapeake would be stealing off of my total acreage by now anyway. This O&G fraud is a nightmare for all landowners across the US being produced by Chesapeake. 

I'll check my files to see what that law is called that gives equal production rights to all Ohio Citizens, if Chesapeake isn't POed at them and assuming the ODNR Chief is still free to apply the laws of Ohio.

Those who can't apply the laws against Chesapeake have an agreement $$$$$ with them.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on June 29, 2016 at 4:38pm

James,

     The legal term that protects your rights to have your minerals produced in a fair manner is defined in the Ohio Revised Code in the ODNR section as Correlative Rights, and is discussed briefly below.

The strange thing is when I do a search of the Ohio Revised Code using the term Correlative Rights the term doesn't show up except in the definitions. Someone must have edited the laws that discussed Correlative Rights. !!!Chesapeake is coming to town, quick delete Correlative Rights from Ohio Law!!!.

Above when I mentioned that 3 families may have had their leases illegally sold, the number is now 32 families. The landowner I spoke with now has the list of neighbors that have had their vertical well leases sold to YOU KNOW WHO, by their vertical well producer. He is going to consult with those neighbors on the list to see if they were aware that their Vertical Well Leases have been sold to a Horizontal driller without their permission.

Anyone who isn't being paid a Royalty, can go to Columbiana County Ohio Recorders Office website and do a search on their name and see if A.L. took liberties in Feb 2012 to sell their leases and collect the Landowners Horizontal Leasing Bonus. This producer made millions, but he may soon be haunted by his actions. Some leases had expired.

More to follow.

From my memory the Judge that ruled on this in the past said that a Vertical Well producer who holds lease must have the landowners signature on an addendum or new lease. Owning a vertical well lease "Doesn't give the producer the right to sell to a Horizontal driller since HE DOESN'T OWN THE MINERAL RIGHTS, HE HAS ONLY LEASED THEM" 

http://www.emlf.org/clientuploads/directory/whitepaper/Symonds_Jeff...

 [2] — Correlative Rights.

Correlative rights is a legal theory limiting the application of the rule

of capture. This theory recognizes the opportunity of each owner of land

making up part of a common pool of oil and gas to produce an equitable

share of such products. In a case of first impression, the Texas Supreme

Court recognized correlative rights as limiting the rule of capture in Elliff

Permalink Reply by David Allen Lilly on June 28, 2016 at 2:07pm

So looking at the ODNR map, which would way more helpful if they showed the bores a little more accurately or showed the actual units, it appears that you are in between two pads each running single bores. I cannot research it as well as I would if it were my property but I suspect that there would be enough room where your property is located fro another well which would need your property in the unit.

Again, the ODNR maps are not stellar, you know the area better than I do though. Go to the ODNR website and find the oil and gas well locator. Keep clicking to zoom in over your area. Find the well to the east and the one to the west, clicking on them will give you the well information and links to various documents pertaining to them, including plat maps showing the units as they are drilled.

If you did this I suspect that, as stated by others on this thread, that there is enough room to go another well bore in between the two on either side of you.

Obviously this is not a great time for oil and gas drilling anywhere, with oil prices so depressed. I don't know if you have dry or wet gas either, but I bet that when commodity prices improve you will see an increase in activity around and including you.

Across the country there has been a rig reduction of about 70%-75%, that hurts those of us, including me, waiting to be drilled.

A great test would be to offer to sell your minerals to any of the many buyers out there. If someone is willing to give you very much for your mineral rights you will very likely get drilled. Nobody is going to give you anything if you are not going to be drilled, and believe me, these buyers know way more about the scenarios than you or I.

Either way, you might have a better idea of what your future probabilities are. I would strongly advise against selling, again, if anyone is going to buy your rights they are really sure they will be receiving a return on investment soon.

Take heart, although I have no way of knowing definitely what will happen to your property, this is a very bad time for drilling the Utica and Marcellus, I would be patient and see what happens when the markets provide better pricing.

I feel better for you having seen the area where your property is located being between two wells with what looks like room to add more.

I wish you the best of luck, you would be well advised to have a legal expert look at this sometime if you know for sure that every one of your neighbors is receiving royalties and you are not.

Permalink Reply by Robin on June 28, 2016 at 2:11pm

When I inquired about selling mineral rights, I was advised that only 100+ acres was being considered, not small plots.

Permalink Reply by Jon on June 28, 2016 at 2:19pm

I don't have that much and I got asked about it. Still, think about how much lease bonus money you could get when you sign and if you renew, before you do that.

Permalink Reply by David Allen Lilly on June 28, 2016 at 11:59pm

I live in Guernsey county and know people with less than 10 acres who sold their mineral rights.

But that is beside the point.

My main contention is that this is a really bad market and a very bad time to make concrete, irrevocable decisions.

In every instance around here it appears the oil and gas companies are doing the barest of minimums until pricing recovers.

In effect I believe that the way the units are laid out may be very effective in locking them up without paying another bonus or actually drilling. If the person who started this thread has property in between two Chesapeake units with only a narrow sliver not unitized it is doubtful that anyone other than them will be anxious to drill that particular area. But that doesn't mean that it wont get drilled, just that it is basically tied up without the drillers paying monies to tie it up.

Either way, if it were me I would print the unit maps and see how much room is in between the units on either side of me before I make any concrete assumptions as to what is going on.

Permalink Reply by bo boboski on June 29, 2016 at 12:29am

Good point, David, on how its possible for an O&G co. to lock up some mineral rights without ever unitizing them or even leasing/re-leasing them by forming units around them so that no other driller would even be interested. A mineral buyer may still be interested,thinking they could deal with CHK better than the landowner on royalties.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on June 29, 2016 at 4:13pm

Robin,

     Everyone and Anyone in the O&G business would like to buy your mineral rights.

In fact this theft will cause large numbers of landowners to sell their minerals rather than be stolen from.

The best way to sell minerals came from Jeff Rokisky in WV, who is licensed in OH, WV & PA. Find him on line and ask if he still sells minerals. At one time he said they would auction your minerals to 25 to 50 bidding companies. No one could do a better job than this for a small percentage, like 6% from my memory.

The best thing to do is keep your minerals until we clean up this theft problem, then the royalties will be closer to 12% than the current 0 to 2% that I'm getting on my 17.5% Gross lease, and the 20% Gross lease I have.

Call this what it is, Ohio RICO Corrupt Activity sanctioned by Ohio with the goal of making all issues a Civil Matter. That way the offending companies stay in Ohio rather than being booted out of Ohio and the US.

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