Lease & Royalty Payments

Butler County | Crime | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Washington County

PA Landman Pleads Guilty to Defrauding Landowners, Off to Jail
September 19, 2013September 19, 2013

A few weeks ago MDN told you about the arrest and charges against a Butler, PA landman–Derek Candelore–who is accused of an elaborate scam in stealing away mineral rights from unsuspecting landowners by forging signatures and using fake companies (see When Landmen Go Bad: Butler, PA Landman Arrested for Fraud). Candelore plead not guilty, but his partner, William Ray, has just pleaded guilty and when convicted will spend something like three years in the clink for his crime.

Mr. Ray will not only do the time, he’ll also have to give back over half a million dollars he received as part of the scam and continue to pay back what he stole from his future earnings after he’s done making license plates in the pen for ten cents an hour…
Read More “PA Landman Pleads Guilty to Defrauding Landowners, Off to Jail”
Broome County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | New York | Tioga County (NY)

Done Deal: Chesapeake Drops Leases on 13K Acres in NY
September 10, 2013September 10, 2013

Last week MDN told you that Chesapeake was set to release 12,000 acres of leases in the Southern Tier of New York, abandoning a legal fight to extend those leases (some of which they paid $2-3 per acre for) by using a legal concept called force majeure (see Chesapeake to Release 12K Acres of NY Leases Next Week). Major media outlets from AP to Reuters are reporting Chesapeake, as of Monday, has officially dropped those leases.

One slight update: it was actually 13,000 acres, not 12,000 acres as originally reported…
Read More “Done Deal: Chesapeake Drops Leases on 13K Acres in NY”
Chesapeake Energy | Columbiana County | Energy Companies | Lease & Royalty Payments | Ohio | Utica Shale

Is Chesapeake Robbing Graves in OH Village…or Getting Robbed?
September 6, 2013September 6, 2013

We can see the headlines now: Chesapeake Energy is a (Gas) Grave Robber! Wait until the anti-drillers get hold of this story… Chesapeake has struck a deal with the Village of Salineville (Columbiana County), OH to lease and drill under 17 acres at the Woodland Cemetery. The deal stipulates no surface disturbance of any kind (a very good idea).

But who is robbing whom? Listen to the deal the village got: Chesapeake is paying Salineville $44,145 annually for five years, plus 15% royalties. The annual payments add up to $220,725, or if you think of it as a signing bonus stretched over 5 years, it’s $12,984 per acre. Wow!! That’s perhaps the highest per acre signing bonus we’ve heard of in the entire Marcellus or Utica Shale. Kudos to the Salineville board members who ~~suckered~~ negotiated the deal with Chesapeake…
Read More “Is Chesapeake Robbing Graves in OH Village…or Getting Robbed?”
Broome County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | New York | Tioga County (NY)

Chesapeake to Release 12K Acres of NY Leases Next Week
September 5, 2013September 5, 2013

About a month ago, MDN told you that Chesapeake has decided to end their fight with New York landowners over extending their leases (see Chesapeake Energy Throws in the Towel on NY Shale Drilling). Although it’s taken the past month to iron out the paperwork, it seems that Chesapeake (and NY landowners) will finalize and sign an agreement “sometime next week” to release 12,000 acres of leases in Broome and Tioga counties.

Chesapeake walking away from these leases is bittersweet. Sweet because it releases landowners from old leases signed before fracking was even contemplated, allowing them to re-sign a new lease with better terms. Bitter because it indicates Chesapeake is unwilling to put up with Gov. Andrew “Ditherer” Cuomo any longer as he agonizes over whether he will or whether he won’t allow fracking…
Read More “Chesapeake to Release 12K Acres of NY Leases Next Week”
Lease & Royalty Payments | Pennsylvania | Susquehanna County | Wyoming County (PA)

NARO-PA Hosting Two Meetings in NE PA in September
September 5, 2013September 5, 2013

MDN strongly supports the great work of NARO–the National Association of Royalty Owners. The Pennsylvania chapter of NARO will host two meetings for landowners in northeastern PA over the next several weeks. The first meeting will be held in Montrose (Susquehanna County) on Sept. 10. The second meeting will be held in Laceyville (Wyoming County) on Sept. 18.

The details:
Read More “NARO-PA Hosting Two Meetings in NE PA in September”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M
September 3, 2013September 3, 2013

In July, MDN told you about a class action lawsuit by some Pennsylvania landowners against Chesapeake Energy over the issue of deducting certain costs from post-production when calculating royalties–costs that the landowners say are not listed in the original lease and for which Chessy does not have the right to deduct (see Some PA Landowners Mull Decision to Sue Chesapeake over Royalties). A number of landowners joined the class action lawsuit. The lawyers worked feverishly and both sides have now settled.

Chesapeake will pay $7.5 million to settle the lawsuit, to be share with the lawyers (of course) and then amongst the landowners. Apparently the settlement will benefit “several thousand leaseholders” who have the option to either accept the settlement or continue on their own by filing their own lawsuit…
Read More “Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M”
Antero Resources | Energy Companies | Lease & Royalty Payments | Monroe County | Utica Shale | West Virginia

WVU Prof Says Antero Well will Generate $300K Revenue…Per Day!
August 30, 2013August 30, 2013

The Yontz 1H well may not produce at these unheard-of levels for an extended period, but heck, if a gas well is bringing in $300,000 per day in revenue, it doesn’t have to last long! That’s the staggering amount of revenue that a West Virginia University professor predicts will be produced by the monster well recently drilled by Antero Resources in Monroe County, WV (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d). At the rate the gas and gas liquids are flowing from the well right now, it will bring in over $2 million per week in revenue for Antero. If royalties are 20% for the landowner, that’s $400,000 per week for the Yontz family!

With those kinds of numbers, no wonder Antero is willing to “roll the dice” and spend a half billion dollars to build a new water pipeline (see Antero Resources Rolls Dice on 1/2 Billion Dollar Marcellus Pipe)…
Read More “WVU Prof Says Antero Well will Generate $300K Revenue…Per Day!”
Carroll County | Energy Companies | Lease & Royalty Payments | Ohio | Sierra Buckeye

Sierra Buckeye Responds: We Didn’t Default on Carroll County Lease
August 29, 2013August 29, 2013

Last week MDN told you about a kerfuffle in Ohio between Carroll County commissioners and Sierra Buckeye, a driller with whom the county signed a lease in July 2012 for 481 acres of county-owned land (see Carroll County, OH Says Sierra Buckeye in Default on Utica Lease). The county says Sierra was supposed to drill by a certain deadline and did not do so, throwing the lease agreement “in default” and implying Sierra is subject to make extra penalty payments under the lease terms.

Sierra Buckeye contacted MDN to tell their side of the story. They claim that yes, they did ask for an extension of the lease terms until Nov. 1 of this year, but that Carroll County commissioners went silent and did not respond to multiple requests, and that no, they are not in default and don’t owe a penny more. In fact, they have canceled (or “released”) the lease per Carroll County’s request–transmitting the release last week. What miffs Sierra Buckeye is that they had to learn about the commissioners’ intentions by reading about it in the newspaper…
Read More “Sierra Buckeye Responds: We Didn’t Default on Carroll County Lease”
Carroll County | Lease & Royalty Payments | Ohio

OH Town Votes to Give Up 1/4 Royalties for Cash Payment Now
August 29, 2013August 29, 2013

Should a municipality that’s leased village-owned land to a shale driller (in this case in Ohio’s Utica Shale) sell some of their future potential royalties for cash now in order to buy a firetruck? It’s not a hypothetical question. Carrollton, OH council members voted this week to do just that. Selling future earnings is nothing new: It happens with lottery winners. They win a lottery with a payout over the next 20-30 years but want (or need) the money now. So they sell their future payments to a third party for a discounted amount of cash now.

It’s one thing for an individual to do it, but quite another (in our opinion) for a municipality to do it…
Read More “OH Town Votes to Give Up 1/4 Royalties for Cash Payment Now”
Lease & Royalty Payments | West Virginia | Wirt County

Wirt County Landowner Group Close to Deal for Huge 241K Acres
August 26, 2013August 26, 2013

The largest Marcellus/Utica landowner group MDN is aware of is the Wirt County Oil and Gas Group, in WV (see WV Group Largest Landowner Coalition in Marcellus/Utica). The Parkersburg News and Sentinel reports the group is close to a deal to lease their considerable holdings of 241,000 acres. The group has closed its membership–no new landowners are currently allowed to join. They’ve narrowed down lease offers to two companies, although they’re not releasing the names (yet) of which companies they’re negotiating with.

A decision is due by an October 5 membership-wide meeting…
Read More “Wirt County Landowner Group Close to Deal for Huge 241K Acres”
Crime | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Washington County

When Landmen Go Bad: Butler, PA Landman Arrested for Fraud
August 23, 2013August 23, 2013

A landman for Penn-Star Energy of Butler, PA, working to secure leases for Range Resources, is accused of a huge scam.

Apparently he used fake companies and forged signatures to steal away mineral rights from some landowners in Washington County, PA–worth more than $1 million…
Read More “When Landmen Go Bad: Butler, PA Landman Arrested for Fraud”
Carroll County | Energy Companies | Lease & Royalty Payments | Ohio | Sierra Buckeye | Utica Shale

Carroll County, OH Says Sierra Buckeye in Default on Utica Lease
August 22, 2013August 28, 2013

In May 2012 Houston-based driller Sierra Buckeye signed a deal with the Muskingum Watershed Conservancy District (in Ohio) to lease 185 acres of District-controlled land for $4,500 per acre plus 20% royalties on all gas produced–really good terms. In October 2012 Sierra Buckeye signed a deal with Carroll County, OH to lease 481 acres of county-owned land for the same terms, receiving a check for over $2 million as the signing bonus. However, built into the Carroll County lease deal are penalties if Sierra Buckeye does not begin drilling by certain deadlines.

The initial deadline came and went and the county extended it. The second deadline is now past and Sierra Buckeye is asking for a third deadline (November). The county has had enough and has told Sierra Buckeye the lease contract is now in default…
Read More “Carroll County, OH Says Sierra Buckeye in Default on Utica Lease”
Energy Companies | Lease & Royalty Payments | Pennsylvania | Range Resources Corp | Statewide PA

PA Director of Game Commission Double-Dipping with Gas Leases?
August 19, 2013August 19, 2013

An extensive investigative article about the director for the Pennsylvania Game Commission, William A. Capouillez, appears in yesterday’s Philadelphia Inquirer. The article spotlights a potential conflict of interest between Capouillez’s day job and his moonlighting side job as an agent for property owners who lease their land for oil and gas development. The issue? He signs private deals with the same companies that often work with his state agency. For one driller–Range Resources–it’s become a serious (legal) issue.
Read More “PA Director of Game Commission Double-Dipping with Gas Leases?”
Chesapeake Energy | Energy Companies | Lease & Royalty Payments | Pennsylvania | Statewide PA

Chesapeake Short-Changes PA Landowner on Royalty Checks
August 14, 2013August 14, 2013

MDN has brought you a couple of stories in recent weeks about landowners suing Chesapeake Energy over royalty checks, claiming Chesapeake is playing fast and loose with post-production expenses (see Bradford County, PA Landowners Sue Chesapeake over Royalties). A new Chesapeake royalty story (below) appears on the ProPublica website. It opens with a poignant tale of yet another landowner who was apparently screwed by Chesapeake with respect to royalties. It’s maddening.

However, we have to put the story in proper perspective. ProPublica is anti-drilling through and through. They have an agenda and that agenda is to make all drillers and anyone/anything connected to fossil fuels look bad, so as you read the story below, keep that in mind. Still, if even 10% of what is reported below is true, it’s disturbing. More than ever, it’s vital that landowners have a detailed, well-spelled-out lease that’s been reviewed and tweaked by a lawyer who knows oil and gas contracts inside and out. It’s also important to monitor every royalty statement…
Read More “Chesapeake Short-Changes PA Landowner on Royalty Checks”
Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania

Bradford County, PA Landowners Sue Chesapeake over Royalties
August 13, 2013August 13, 2013

About a month ago, MDN told you that a couple of Scranton-area lawyers were looking for landowners with Chesapeake Energy leases who believe they’re getting the short end of the royalty stick, to participate in a class action lawsuit against Chessy (see Some PA Landowners Mull Decision to Sue Chesapeake over Royalties). At issue is how royalties are calculated–what is considered to be a post-production cost. Some landowners say Chessy is claiming too many expenses and in the process shorting payments to them.

Some landowners in Bradford County, PA have decided to join the lawsuit:
Read More “Bradford County, PA Landowners Sue Chesapeake over Royalties”
Economic Impact | Industrywide Issues | Lease & Royalty Payments | Ohio | Statewide OH | Utica Shale

Muskingum Watershed District: $77M in Utica Lease Revenue, So Far
August 12, 2013August 12, 2013

There’s no doubt a change has happened at the board of the Muskingum Watershed Conservancy District (MWCD). Last year they self-imposed a moratorium on selling water to Ohio Utica Shale drillers (Muskingum Watershed Reverses Decision to Sell Water to Drillers). This year, they can’t wait to lease MWCD land to Utica Shale drillers and sell them the water to frack it (MWCD to Sell 138M Gallons of Seneca Lake Water for Utica Drilling). Why the change?

An MWCD official talked about the change in thinking for the MWCD board at a meeting last week of the Guernsey (County) Energy Coalition…
Read More “Muskingum Watershed District: $77M in Utica Lease Revenue, So Far”