Help with Transfer issue

Started June 20, 2017 at 07:23 am by @James Honeycutt in Haynesville Shale

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James Honeycutt
06/20/17 07:23:21AM
I purchased a property 12/31/2015.  In September 2016 I received a transfer request from BHP stating that the property I purchased was 'comingled' with the adjacent lot, that the lot I purchased straddled two different producing wells, and that during their look into transferring the rights to me, it was discovered that while the 'comingled' property was leased as 4.8 acres, the actual size of the lots in total was 4.47 acres.  Their solution offered was a form which myself and the seller were to sign in which the seller retains the 2.4 acres of rights for their property, and I get 2.07.  These lots are the same size and I don't feel this is a fair offer.  I'm also not sure of the legality of it, it sounds like BHP acquired a lease (I think from Chesapeake) that offered greater rights than the physical property, but is trying to 'resize' it to match the map. Does anyone have any advice?  I think I'd be ok with just getting the 2.23 I am due, but wanted to make sure I don't make any mistakes.  Also, I haven't received a dime of 2016/2017 royalty yet.  Is that just accruing somewhere?

Update: Thanks for the response - for some reason it wouldn't let me 'reply', so I updated here.  My current thinking is to discuss with the seller and see if they're amenable to splitting evenly at 2.235 acres each, and if so, see if we can proceed that way.
Skip Peel - Independent Landman
06/20/17 11:18:09AM @skip-peel-independent-landman:

Many drilling units were formed in the early days of the play without sufficient survey and title due diligence.  Chesapeake was among the worst offenders.  When companies began to drill Cross Unit Laterals (CUL), they encountered the challenge of properly allocating production to multiple units with differing ownership interests.  Where there was insufficient survey records, companies conducted surveys to ensure proper payment data.  It sounds like Chesapeake probably took the 4.8 figure from an existing conveyance document without actually performing a proper survey.  Then BHP, wishing to drill CUL wells, had a survey conducted that showed the actual acreage to be 4.47.

That's a landman opinion based on your statements.  Beyond that I suggest that you see an experienced O&G attorney.  Since it's a small acreage interest, you might want to ask BHP if they will share their survey with you.  If they refuse to do so, and there is a new unit plat filed with the state, it will be entered in the state database and available at some point in time for public viewing.

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