OT Gas Lease

Got a question about gas leases. I signed a contract with Chesapeake Energy back in 09. Nothing came of it for a couple years, then some wells came in and I started getting some royalties in'11, continuing to now.

Last week I got a letter from a law firm wanting me to join in a no risk class action law suit against Chesapeak, accusing them of underpaying lease holders. I have taken no action.

Then this week I get a letter from Chesapeak. It says that as a result of an overpayment, my account has a negative balance of $6,210.97, and to prevent my account from being turned over to their legal dept, I am to remit payment or contact their Revenue Analyst to discuss repayment options.

I haven't talked to my neighbors to see if they got similar letters. This all looks official, don't think it's a scam. Where they got that figure is a mystery, that's way more than I've collected from them! And, no I didn't send them a check! LOL

I'm sure this is some kind of legal ploy to counter the lawsuit. Just wondering if anyone else has encountered this. Looking for a heads up, trying to stay a step ahead of them. Also, if I sign up for the lawsuit, will my payments be with held until the suit is settled? I don't depend on these payments to survive, and it's not my style to take people to court, but still I don't like being taken advantage of or intimidated with nasty letters!

Steve go through your land man that negotiated your lease with you (if that person is still employed) and let them sort it out whether this is real or a scam. If this is no longer possible you should be able to contact Chesapeake's accounting office through the information that comes to you with your royalty payments. Also don't forget to read your mineral lease agreement, it may and should have their and your rights spelled out in this situation.

By what you describe this feels like a scam, but I believe contracts in our area (Wyoming) do not allow them to retroactively demand back any overpayments. Also I would expect any letters like this would come certified mail, not regular first class.

I camt to conclusion many years ago that every letter in the mail, someone wants some of my money.

I think that's the company that the Michigan Attorney General has filed suit against for fraud. They have been signing leases here then not honoring them. The A.G. says they're just tying up land so nobody else can lease it.
If they're pulling something shady with you,it sounds like it's legit and in their nature.
I didn't try it,but just google their name and Michigan Attorney General and see if anything comes up.

Steve, it is probably not a scam, although it sounds like there are some problems on their end, especially if they are asking for more back than what they've paid. It is not uncommon to have adjustments, sometimes the natural gas buyers find mistakes in their meters and allocations, and the process of getting it sorted out gets very confusing.
If you are not the sole owner of the royalty interest in the well, then your neighbors who also share in the well should have gotten similar letters. If you don't know all of the owners in the well, you might check at the court house to see if there is a recorded lease or unitization or pooling agreement. Start with sending a certified letter asking for an explanation and accounting of all funds. Get out all of your royalty check stubs and compare to the reconciliation they (should) send you. Compare this to the division order you signed before you started getting royalty checks. If you can see where the problems are, send them a letter pointing out their mistakes.
Don't expect to get anymore royalty checks for a while, because the terms of the lease will probably allow them to net the funds they claim you owe them against future payments
Without knowing more of the facts, that's where I would start.

You spelled "Chesapeake" two different ways.

If you signed a contract with "Chesapeake" and you are getting letters regarding "Chesapeak" (no e), then the letters are a scam. Someone is either trying to get you to send them cash outright or join the phony lawsuit so they can work you over for "lawyer's fees."

They are known as ''cheapskate'' in my neck of the woods. If you recieved a letter was it certified? If not I would not respond to whomever is on the other end whatsoever and if they start sending certified letters I would refuse to accept.

rrlund is right, that is the same company that is currently involved in litigation with the State of Michigan, and they are crooks. Weather or not the letter you have recieved is legit or not, is questionable. You need to pull out your original lease, and any documents you signed when you started getting royalty payments, hopefully somewhere in your documents you are relieved of obligations due to their so called overpayment. It almost sounds like they may have realized they forgot to steal your royalty payments like they have others and are now trying to get your money as well, which is where the class action suit has come from, Chesapeake suddenly cut most land owners shares by over 90% claiming post production costs. I would keep the paperwork, and possibly talk to an attorney. The class action suit may be worth looking into. There is a website: naturalgasforums.com that has lots more info on this issue.
poke here

Hear stories all the time about oil,gas leases and loggers. Has anyone EVER felt like they did not get ripped off ?

Chesapeake was the primary initial developer of the Haynesville Shale here in northwest Louisiana. It came in early and stealthily leased up hundreds of thousands of acres before word leaked about the presence of the Haynesville. And yes, I was one of the ones taken in on those early low-fee, low-royalty leases. And yes, I still have a bad taste in my mouth about it, even though I realize it was just good business on their part. Two wells have been drilled in my section; one was a dud, and the other is produced so sporadically as to be irrelevant.

A class-action is being/has been formulated by royalty owners in this area against Chesapeake. I'm not involved, but I understand their complaint is that Chesapeake produces their natural gas and then sells it to a Chesapeake subsidiary at a below-market price. In effect, by selling the gas to itself, Chesapeake can low-ball the royalty owners. I think the group is also contending that Chesapeake is inflating the production and transmission charges that it passes on to royalty owners. I haven't heard about anyone being dunned by Chesapeake for overpayment. I think that down here that would be a real stretch, but it would dovetail with Chesapeake's reputation.

I would send them a certified letter. Tell them that you sent them payment in full via Attorney General of the United States, Eric Holder. Lois Learner form the IRS came by and picked up the check from you, and she sent you confirmation in an E-mail. Tell em you deleted the e-mail from Ms. Learner, but you are sure she kept a copy of the e-mail confirmation.

That ought keep em busy for awhile. :lol:

Gene

Are you in Ohio? Don't do anything about the letter.

some good advice here, about talking to others in your unit.

Chesapeake is one of the shadiest companies in the business. bunch of rubbish.

I've had personal experience with them.