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Author Topic: QUESTION ABOUT ROYALTY ALLOCATION  (Read 18131 times)

JEB

  • Posts: 1397
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #15 on: January 26, 2010, 12:54:33 PM »
The meeting I attended was at a business friend's house in Towanda.
The CHK rep told my friend that they are going to drill a well at the Towanda airport and needed him to sign a production unit change.

I ask him if he was familiar with the wells being drilled in Troy and West Burlington Townships.  He said he was.  I told him that my land was to be two of the production units when they are formed and that I was leased with CHK.  I told him that I also had a few acres that was leased to Fortuna that were house lots. I told him the land of mine as well as about 30 acres of my neighbor's Fortuna leased land would fall in those production units  because this land is surrounded by that I have leased to CHK.  He told me that no deals were ever made with Fortuna on these properties and we would receive no royalties from them.  He said that the land leased with Fortuna would be deducted out of the units when they are formed.

I do have an update, a Fortuna rep just called me and said she will do some checking and will let me know what they intend to do!     

Tuckabuckaway

  • Posts: 481
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #16 on: January 26, 2010, 02:14:53 PM »
Quote
He said that the land leased with Fortuna would be deducted out of the units when they are formed.

So long as the well bore doesn't pass under the subject properties, I see no reason why CHK couldn't do this, especiialy for the parcel sizes being discussed.  Given how CHK "rolls", I'm sure they see no benefit in aiding their largest (and most hated) area competitor via HBP, and furthermore, they probably figure they can choke out those Fortuna parcels until the lease expires.  As that time approaches, they can pull out all their bare-knuckled, high-pressured, shadowy tactics and pick those isolated parcels up on the cheap.

FWIW, I don't think many operators other than CHK would actually do the above, and if it weren't Fortuna, I don't think CHK would either.
A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government.   - Thomas Jefferson

norman

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #17 on: January 26, 2010, 02:18:48 PM »
  Jeb, This thread really wasn't making much sense to me until your last statement. The Chesapeake rep. (probably a broker) had one objective and that was to get a change of unit size signed. Apparently without the ability to offer anything for this signature. His method: Scare tactics. Always know who you are talking to and their motive.

duffy

  • Posts: 2813
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #18 on: January 26, 2010, 03:05:25 PM »
I agree norm, the first post was CHK field man, completely different than a chk rep. The field men are just working class guys dealing with the landowner and doing their jobs, some reps i just don't know about. If the reps were given up to date stuff and real factual info instead of their bosses lingo there might not be so much misinformation in meetings with landowners.

Dogbone

  • Posts: 1517
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #19 on: January 26, 2010, 03:41:37 PM »
He said that the land leased with Fortuna would be deducted out of the units when they are formed.  
And that is precisely why if Chesapeake were to drill, you would receive "0" royalties from Chesapeake for that particular property.  The properties leased by Fortuna are not included in Chesapeake's unit.  They would be merely surrounded by Chesapeake's unit.   By PA law Chesapeake can not drill under those properties leased to Fortuna.  That is of course if Fortuna doesn't flip them to or make other arrangements with Chesapeake.  What lies?

JEB

  • Posts: 1397
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #20 on: January 26, 2010, 04:09:12 PM »
I have the answer:  First it was a CHK FIELDMAN. The Fortuna OFFICE PERSON call me back and confirmed what the CHK FEILDMAN said.

1- No deals have been made to include these Fortuna leased parcels in the CHK production units.  Neither company is obligated to make any deals now or in the future regarding these parcels.  If the deal or swaps haven't been made by now, one probably never will be made.

2- These Fortuna parcels will be omitted from the CHK production units.

3- CHK can legally horizontally drill anywhere they want except under these Fortuna parcels located in the CHK leased acreage.

4- The landowners of these Fortuna leases will not receive a royalty for any gas.

I ask her what Fortuna plans to do with this acreage and she said it was impossible to tell at this time.  I ask if the leases would expire worthless,  she said she didn't have an answer at this time.


For me it is a loss of only a couple of acres.  For my neighbor's it is a devastating loss if a deal doesn't get made!  I told her that and she said they didn't like to see any landowner go without a royalty and she would see what she could do!  

LCW

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #21 on: January 26, 2010, 04:29:11 PM »
Fortuna OFFICE PERSON????  Jeb, that could be the janitor. 

JEB

  • Posts: 1397
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #22 on: January 26, 2010, 04:49:30 PM »
Fortuna OFFICE PERSON????  Jeb, that could be the janitor. 

LCW,

I did not get her job title.  She is the person that called me back with the answers to my questions!

I have to ask:  Do you people think that all Chesapeake, Fortuna and I do is sit and make up lies to get the forum pissed and upset?  Give me a break, I am trying to help people get what they deserve and not get screwed!  For some reason the forum thinks that I am always lying and that I am here only for my own benefit.


duffy

  • Posts: 2813
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #23 on: January 26, 2010, 05:14:08 PM »
The CHK fieldmen i've met were working on site related issues or the COMPANY MAN on site. Everything else has been handled by contractors that represent chk, and are under different guidelines than true chk employees. Why would they lie? i have no clue but not everything is the same, and not everybody thinks you are only here to benefit you. Look at it from the BIG picture, most don't see or deal with what we do every day and are looking for answers, if i remember right that's what started this forum, the search for info and truth. Is CHK a good Co. yes, are some of their contractors welllllll. The verdict is still out, Most have never dealt with Fortuna, to quote gone fishin It's just Business. ;D from one of the greedy members

LCW

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #24 on: January 26, 2010, 05:21:54 PM »
Jeb-

Don't be so defensive when you are challenged.   What doesn't jive for me is what degree of control does this woman think she has in the "unit" decision making process.  I would guess "zero" if she's answering the phones.

I'm not saying you are fibbing.  This is just an observation.
 

JEB

  • Posts: 1397
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #25 on: January 26, 2010, 05:41:12 PM »
Jeb-

Don't be so defensive when you are challenged.   What doesn't jive for me is what degree of control does this woman think she has in the "unit" decision making process.  I would guess "zero" if she's answering the phones.

I'm not saying you are fibbing.  This is just an observation.
 

She didn't have any control at all and told me that.  She was just telling me what they at Fortuna told her to tell me!
I guess we just wait and see what happens.  We will either get paid or we don't.
I don't believe everyone is a liar!

LCW

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #26 on: January 26, 2010, 05:50:40 PM »
I have reread the thread.  The facts appear to have changed halfway through.

I am with Tuck on this.


Jeb-Tell your friend to worry about things he/she has control over. 

Remember what has been posted on this forum time after time, once you sign, you're theirs.


beazer

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #27 on: January 26, 2010, 06:48:04 PM »
Any thoughts? Why would Fortuna in the last few weeks lock in 50 acres @ 5500/20 in what I believe (may be wrong) to be a CHK area (Standing Stone) knowing they would not be able to drill or some how cash in on it??

LCW

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #28 on: January 26, 2010, 06:54:34 PM »
Thanks Beaz!  I guess the janitor is not in charge of Standing Stone's units.

Berak

  • Guest
Re: QUESTION ABOUT ROYALTY ALLOCATION
« Reply #29 on: January 26, 2010, 08:25:06 PM »
If your friend has any decent amount of land, he should be getting his own vertical if he signed the FG lease.  He can then thank CHK for all the extra cash.


FG / Fortuna lease:

10. OFFSET WELL PROVISIONS.
Should a Well be drilled and completed on lands adjacent to the Leased Premises as a Well capable of production in
Paying quantities with a bottom hole location of 660 feet or less from the boundary of the Leased Premises
(?Adjacent Well?), but the Unit for such Adjacent Well does not include any portion of the Leased Premises in the
Unit therefore, then within six (6) months of Lessee?s knowledge of the completion of said Adjacent Well as a Well
capable of commercial production, the Lessee shall take such action as would a prudent operator under the same or
similar conditions, to protect the drainage of any and all Oil and Gas from Formations underlying the Leased
Premises, to include, if necessary, the drilling of an offset well or Lessee?s exercise of its rights under Subsection
27(l) as extended.


His 30 acres should allow for a nice easy vertical, he can then drain the CHK leased gas.
« Last Edit: January 26, 2010, 08:30:52 PM by Berak »

 


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