Hard to keep reading about contracts (leases) that are written and entered into in order to preclude wasting time and money in court argument and ultimately ending up there anyway.
Don't you agree ?
Philanthropy, Fraud and Market Manipulation, come on Chesapeake! Of course if the worse consequence one can expect to see if restitution, that isn't much of a drive to change is it.
I wonder what the process was for them to decide who to do it to? It will be in court for 5/10 years,lawyers will make out big time. They under pay $10 million, settle out of court years later for $6 million. That's a $4 million profit! Plus get to use the money for all them years before they have to pay. Good business,I suppose,in their eyes. No one to stop them until JAILTIME comes into the picture.
The former Ceo. Unfortunately though, if this article in the post is accurate, the Lessors will also end up unwillingly giving some away or be burdened with fighting legal battles for several years. Very sad that with the money these companies make, landowners are left vulnerable.
Just curious. Do you think any Lawyers work on a contingency basis? Meaning if you don't win the royalty case against big oil they get nothing but if you do then they will get paid. It seems to me that it would be a win win for all. I can see some O & G owners would not want to bring a lawsuit over royalties because of the expense of a Lawyer and what if they lose.
So lets say the landowner thinks he's been cheated out of $12million. He gets a lawyer and sues. Years later, the O&G settles for $6 million. The attorneys take $2million plus $1 million in expenses. The landowner gets $3 million, and pays taxes of about $1 million. Everybody wins!
I completely agree with you. Do you think things like subjective production costs, fluctuation in the market prices, unknowns of whether they will drill and fear of being cheated will nudge more landowners to consider selling rights vs leasing them?
Perhaps this is one way to protect the cat.
I have always thought sell some and keep some is not a bad way to go, in whatever proportion you are comfortable with. I know many are very steadfast in advising not to sell, however, the selling is guaranteed money, so if you can get a price you are happy with I think it's not a bad strategy to sell some and keep some. Get a lump sum for selling a part, but still receive royalties if/when they come. Just my opinion.
Have often thought that may be the exact reasoning / impetus behind all of the seeming discourse between Lessees and Lessors (if we can believe the many horror stories as told by many Lessors / Landowners commenting here).
Just saw this today - PA landowner who won against CHK in arbitration. Got all deductions back, however, arbitrator did not agree that CHK was intentionally selling gas for less than market price.
Somewhat encouraging; but, still jaundiced; as it seems to me that four (4) years locked in argument over obvious points of order within a clear contract is a long, long time.
Also wondering how much of the 'recovered' money went to the Accountant Lessor's Legal Representation ? Thinking you can lose even if you win.
Sure, it's not perfect. Contract should have been honored as-written from day one. Step in the right direction, though. Maybe CHK had to pay significant portion of the lessor's legal fees since the lessor ended up being mostly/partially correct?
Or they hope that you don't notice that they're deduction too much so you're basically loaning them money. If you do realize it and it's worth while to take action against them and win, they still may end up better of than having paid you the right amount in the first place. It's very unfortunate.
Another interesting challenge and victory just posted today in the Wyoming County Group/GMS. PA man challenged a $5000 monthly deduction and Chesapeake reimbursed him via Arbitration. Seems like a normal day in the field for them. No fraud, no problem, just an oops and here is your check.
I tried to copy the thread and paste it but was unable.
What middle class America needs to know. Obama spent 8 years trying to destroy America, and now he and George Soros are creating an American affiliate of the Muslim Brotherhood, a terrorist organization, that flies under the name Organization for Action. Alt-left media, CNN, NY Times and Washington Post are doing their best to distract Americans from these facts...
WE used to call the McClendon types Promoters because all they did was take other peoples money , and sometimes produce for a while. So lets call dishonest oilmen what they are PROMETERS and not insult the good with the bad. The probles is the same in all parts of business today. What was done with a handshake and a simple written agreement is now drafted by lawers to make it easy to cloud the meaning of the agreement. And the only winners are the lawers. Maybe landowners should ask that the leases be voided for fraud ulant activity it will only take a few cases to strighten out the promoters.