Chesapeake to start deducting some costs from royalty checks



Chesapeake to start deducting some costs from royalty checks

Posted Wednesday, Aug. 10, 2011

About 20,000 royalty owners who have Barnett Shale natural gas leases with Chesapeake Energy will likely see their royalty checks slashed by roughly 25 percent after the company deducts expenses associated with post-production, such as gas gathering, compression and transportation.

The actual percentage and dollar amount decreases in royalty checks will vary monthly based on natural gas prices, post-production costs and output from wells.

Affected royalty owners were notified of the new company policy in recent letters. The changes took effect with July royalty checks that were based on May production, according to Julie Wilson, Chesapeake vice president for urban development and the top executive in its Fort Worth regional office.

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2 Responses to Chesapeake to start deducting some costs from royalty checks

  1. You’d almost think that once a deal is made that it’s a deal ….. right? Wrong. If the company decides to change it’s policy then the deal is that you are screwed. Don’t mess with some of the best drinking water anywhere on Earth. It’s right here in Central New York.

  2. Glenda Ramsey says:

    How is it that Chesapeake has the right to arbitrarily change the leases of royalty owners without even giving them the courtesy of a vote in the matter? Isn’t this essentially changing our leases without our knowledge and/or permission? Who can tell me what rights royalty owners have over their own minerals – minerals that Chesapeake (and now Total, I guess) makes tons of money from? Is this legal? Are the royalty owners “here for Chesapeake and Total”? Are our own minerals “here for them”? What can royalty owners do to stop this snowball from running amuck? The attempt to bring a class action suit regarding underpayment of royalties went nowhere, and now we have this significant post-production amount being deducted from our royalty checks. Our payments seem to be methodicallly whittled away one after the other. Are there no laws to protect royalty owners? Does Chesapeake have total control over “our” royalties? What they are getting away with cannot be legal. Throwing royalty owners under the bus like this is despicable!

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