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Chesapeake Energy (CHK -0.8%) has exploited little-known laws in Texas and at least three other...

Chesapeake Energy (CHK -0.8%) has exploited little-known laws in Texas and at least three other states to force land owners to hand over drilling rights and sometimes forfeit profits, according to the latest Reuters special report on the company. Land brokers, land owners and lawyers say such deals are pushing ethical and legal limits.
Comments (7)
  • zebra114
    , contributor
    Comments (251) | Send Message
     
    I certainly hope this doesn't surprise anyone.
    2 Oct 2012, 12:48 PM Reply Like
  • Maria Auziliadora
    , contributor
    Comments (628) | Send Message
     
    No it does not surprise me the Rich wants to take from the poor!!!
    2 Oct 2012, 01:37 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2145) | Send Message
     
    maria
    I see you have an mba in finance, just a suggestion , your comment leads to an idea that you lean towards assumptions without understanding of the law which in ways can make you poor.
    2 Oct 2012, 10:43 PM Reply Like
  • cbernard
    , contributor
    Comments (2) | Send Message
     
    This story is disingenuous. The mandatory pooling laws have been in place for decades. They were developed to allow consenting minerals owners the right to explore when a minority owner objected. The minority owner is given options: accept a government agency reviewed lease payment and royalty; or, participation in the working interest profits of a well(s) by posting its share of the costs. While there may be some question of ethics on the leasing activities, to merge these in with exercise of a stautory right of lease holders, is similar to mixing stock fraud with legally covered sale of shares.
    2 Oct 2012, 05:01 PM Reply Like
  • Ron Reed
    , contributor
    Comments (282) | Send Message
     
    Many people don't understand how surface rights and mineral rights work and sometimes get ugly in the real world. If you own land and do not own the mineral rights, the owner of the mineral rights has the right to access those minerals. They (mineral right owners) almost always work very hard to come to an agreement with the land owner before anything else is done to cover damages in access, use loss, etc. Most companies (CHK included) will bend over backward for the land owners just to keep them happy, going over and above the original agreement. For example, building roads to suit the landowner's use later on, building fences where and of what type the landowner wants, restriction of movement when livestock is out, clearing more land that the oil company needs (so the landowner gets more grazing land), etc. Some people are just totally bent on not allowing access and they are the ones that end up on the short end. Generally they are folks that would never be satisfied and end up being taken to court and loose all the mandated funds to pay for the legal fees. I'm sure each case is a little different but I've seen a lot of both sides and rarely does the oil company screw the landowner.
    2 Oct 2012, 05:19 PM Reply Like
  • tp1954
    , contributor
    Comments (2) | Send Message
     
    Don:
    Come join us in dealing with Chk in ne pa. I have dealings with Chief,Fortuna and Chk. Cheif and Fortuna have been good to work with...Mostly honest.
    Chk has been the worse ,most untrustworthy, threatening company I have ever dealt with in over 35 years of doing business. Believe me that I am being very polite in describing how this company does it's business. In no manner should they or their landmen be trusted. DO YOUR HOMEWORK ....THEN HAVE YOUR ATTY CHECK IT.
    2 Oct 2012, 09:52 PM Reply Like
  • dovecreek
    , contributor
    Comment (1) | Send Message
     
    Chesapeake is due criticism for some of their leasing practicies, but as a general rule it is much more cost efficient for Chesapeake or any oil company to negotiate and settle with the mineral owner rather than use the courts or regulatory agencys to obtain a drilling lease.
    The rest of the Reuters article is a hatchet job wrote by some one with no knowledge of the leasing process. If the companies are dealing with large tracts of land (160 acres or more) with few mineral owners than the leasing is pretty straightforward and simple. But, in the instances mentioned in the Reuters article, these are small tracts of land in metro areas, city lots or small acreages that are a small fraction of the total area to be leased.
    Imagine if your Great Grand Parents owned 160 acres near Dallas in the 1920's, they died leaving equal shares to 6 kids, your Grandad died leaving his share equally to 6 kids, your dad died leaving his share equally to you and your 3 brothers and sisters, you own 1.1 acres that you have platted and sold 5 small lots. Now you and your cousins have scattered all over the world and some have died. I forgot to mention that some of your kinfolk sold their mineral interest and others willed theirs to the Catholic Church. See the problem?
    Now enters the oil company who wants to find and lease mineral interest from all of these people. Therefore a method to allow the majority to benefit from their mineral ownership and allow the well to be drilled. This is an oversimplification but is a partial explanation of the difficulty in obtaining leases necessary before a well can be drilled.
    2 Oct 2012, 09:52 PM Reply Like
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