There are quite a few angry royalty owners up in Pennsylvania. They’ve put together a video that tells their side of the story.
Category Archives: Chesapeake
Royalty Cases Against Chesapeake and Southwestern
Some folks are suing Chesapeake and Southwestern for back royalties, among a couple other things. The other things are not likely to be high-dollar amounts, but the royalties could add up.
There are quite a few cases against Chesapeake for back royalties in other states. We’ve been surprised that there haven’t been more cases against Chesapeake in West Virginia. It seems that CHK would have done the same thing to West Virginia royalty owners that they did to Ohio, PA, and Oklahoma royalty owners.
If anybody out there has a case that they’d like to take up against Chesapeake for back royalties, give us a call. It won’t hurt and could help. It could help a lot.
304-473-1403
Chesapeake Sells Interests to Haymaker Resources
Chesapeake Energy needs cash, and it needs cash now, but it can’t go to J. G. Wentworth. Instead, they’re selling some of their interests in oil and gas wells to another company, Haymaker Resources.
It appears that the interests signed over to Haymaker are scattered around, not in one specific area. CHK is getting rid of what it calls “non-core” property. That means this is probably not Marcellus or Utica property, unless it’s on the outskirts of the Marcellus/Utica area. However, if you fit that description you might be receiving royalty checks from Haymaker in the future. It might be worth it to double-check.
Northeast Natural Energy Drilling in Monongalia County, WV
Marcellus Drilling News (a great source for information about oil and gas development in the Marcellus/Utica area) is reporting that Northeast Natural Energy has hired a new rig. Right now, it seems that NNE is working exclusively in Monongalia County, WV, using leases that it bought from Chesapeake and leases that it is buying up itself. NNE is going after Marcellus shale production there, which strikes me as odd because Chesapeake pulled up stakes in Monongalia County back in 2009 because it had drilled a few wells and the production was disappointing. At least, that’s what the scuttlebutt was between the landmen that were working on the project. With gas prices lower than they were then, it doesn’t make much sense for NNE to be drilling where CHK quit. There must be some other factors in play that we aren’t aware of. Nevertheless, best of luck to NNE. We’re always glad to see that somebody is drilling and taking leases in West Virginia.
Chesapeake “Loses” 1.1 Billion Barrels of Oil
The drop in oil and natural gas prices doesn’t just affect the price of gas at the pump or your monthly utility bill. It also hits energy companies awfully hard, and not in ways you might expect. In this case, over a billion barrels of oil are going to just disappear off of Chesapeake’s books. That’s billion with a B. That’s disappear as in no longer exist.
How does that happen?
Oil and gas companies are allowed to give a value to their wells even before drilling them and producing gas from them. They do that to get loans from banks. There’s a formula provided by the SEC (not the football conference) that they use to determine that value. The formula includes the price of oil or the price of gas, depending on which the company is expecting to produce. When the price goes down, the value of the undrilled wells goes down. It has more to do with what’s economically producible than anything, so a lot of properties that were marginally economic are no longer considered economic, and so have no value. Poof, $1.1 billion dollars in value just disappears.
Oil and gas is just crazy.