How does chesapeake get away with underpayment of royalties? They pay 1/2 per unit amount compared to other companies. They should be paying the fair market value. Why must they cheat the people that are allowing them to drill and make millions upon millions of dollars. It is not right. There is a class action lawsuit against them. I hope they are made to pay us the money that is rightfully ours , the land owners of the Barnet shale. Big company sticking to the little guy again.
Jay,
That's a pretty serious accusation to make without any proof. Can you share examples or at least link to articles that reference what you're talking about?
I've heard whispers of the same about many operators over the years and often it simply has to do with production declines.
Yes sir ,, there is a class action suit in progress right now against chesapeake. I have wells with cheasapeake and eog. energy. The price per unit with EOG is on par with the current market price of NG. Cheasapeake on the other hand pays out on average 1/2 that amount. For example my statement for april states the price per unit was 67 cents. The market price is low ,, but not that low. I found the info about the class action suit online. I ll find it again and post the link. Thanks for your reply.
Jay,
The bonus on a lease is just the tip of the iceberg when it comes to protecting your ownership rights and royalty payments. Check the lease provisions to see if your lessee has the right to sell product to an affiliate a;nd if so, how a fair market price is determined. Royalty payments are a function of price and quantity, both of which should be subject to independent determination in any lease you sign.
yes sir thank you, thats the point of the class action suit, they violated the covenent. The unit price is determined by the market, then they have the right to deduct other services. They sell to their own affiliate at a discount. I dont see any provision for that in the lease. Like I stated on my last statement showed the price per unit which is supposed to be the market value that month , was 67 cents. The market price was 2.80 . I have wells with EOG and the unit price they based pay outs on was close to market or exactly market for that month. So I just think they are not dealing in good faith. I also researched and found that in Virginia the same type of class action suit was brought against Cheasapake, and the ruling went against the company. Ofcourse they are appealing the decision. I feel they are wrong and should pay back royalties and interest. Jay Hester
Go get 'em!!
jay hester said:
yes sir thank you, thats the point of the class action suit, they violated the covenent. The unit price is determined by the market, then they have the right to deduct other services. They sell to their own affiliate at a discount. I dont see any provision for that in the lease. Like I stated on my last statement showed the price per unit which is supposed to be the market value that month , was 67 cents. The market price was 2.80 . I have wells with EOG and the unit price they based pay outs on was close to market or exactly market for that month. So I just think they are not dealing in good faith. I also researched and found that in Virginia the same type of class action suit was brought against Cheasapake, and the ruling went against the company. Ofcourse they are appealing the decision. I feel they are wrong and should pay back royalties and interest. Jay Hester
I cannot open the link. Can you attach it instead?
jay hester said:
Jay, They may be making millions on top of millions but the CEO has literally (allegedly) been spending/borrowing it faster than they can make it! But fortunately CHK is more the exception than the rule.
Dear Mr. Hester,
Many people wonder why you should have a plant products provision in the lease or a sale to affiliate or subsidiary provision as well.
Now you see why.
Jay,
Good luck. I hope you and all of these other mineral owners get every dime you're owed plus interest. If you or I did this kind of crap we would be in the crossbar hotel.
Clint Liles
Charles Emery Tooke III said:
2821-CoffeyvChesapeake.pdf (4.43 MB)I cannot open the link. Can you attach it instead?
jay hester said:
Buddy Cotten said:
Dear Mr. Hester,
Many people wonder why you should have a plant products provision in the lease or a sale to affiliate or subsidiary provision as well.
Now you see why.
Best,
Thank you sir , but do you mean that if it is not stated that they cant ,,, they can? It should be the other way around. They should have to state the practices they use in the lease agreement. I dont think they have done that. Ill keep hoping it is settled before the company goes bankrupt.
Thanks to everyone for their input. If you think your right and someone else agrees,,,, well at least thats something.
Thanks Jay. You have to right click on the attachment and hit "Open in New Window" and then save, but it came through.
One thing the Mineral Owners may run up against is I think the Texas Legislature passed a bill disallowing Class Action Suits for this sort of issue. That the Mineral Owners will have to all sue as individuals.
Buddy, do you have any information on that?
jay hester said:
Charles Emery Tooke III said:I cannot open the link. Can you attach it instead?
jay hester said:
Charles,
That is the first that I am aware.
I have read that the Texas Supreme Court resists class action suits. I would assume that that the suit, like most classes of action by tort lawyers, are hoping for a quick settlement than a protracted issue where the commonality of the class must be examined on a case by case basis.
Maybe one of our lawyer friends can illuminate us.
yes sir this suit was filed in oklahoma just for that reason
Charles Emery Tooke III said:
Thanks Jay. You have to right click on the attachment and hit "Open in New Window" and then save, but it came through.
One thing the Mineral Owners may run up against is I think the Texas Legislature passed a bill disallowing Class Action Suits for this sort of issue. That the Mineral Owners will have to all sue as individuals.
Buddy, do you have any information on that?
jay hester said:
Charles Emery Tooke III said:I cannot open the link. Can you attach it instead?
jay hester said:
yes sir the suit was filed in oklahoma for that reason and being handled by a oklahoma law firm
Buddy Cotten said:
Charles,
That is the first that I am aware.
I have read that the Texas Supreme Court resists class action suits. I would assume that that the suit, like most classes of action by tort lawyers, are hoping for a quick settlement than a protracted issue where the commonality of the class must be examined on a case by case basis.
Maybe one of our lawyer friends can illuminate us.
The case was filed in 2010. Any update??? I'm sure something has happened since then.
Also, I've heard about this in the Haynesville as well, but I've never seen anyone say here's a copy of my check and here's a copy of my neighbor's (different operator).
Would you be willing to mark out all of the personal information and upload you and your friend's check stubs?
I have contacted the law firm for status update, but havent heard back. In Virginia same case against them ,cheasapeake lost, but is apealling. I sure they can tie it up for years and years. If we win and cheasapeake is not bankrupt by then, and they pay us what they owe, Oh yes I will post it to the world and jump for joy. Thats my retirement money.
Mineral Guy said:
The case was filed in 2010. Any update??? I'm sure something has happened since then.
Also, I've heard about this in the Haynesville as well, but I've never seen anyone say here's a copy of my check and here's a copy of my neighbor's (different operator).
Would you be willing to mark out all of the personal information and upload you and your friend's check stubs?