Read the letters in the Fort Worth Star-Telegram.
Gas leases
"Protecting property owners' mineral rights," my foot. (See: Wednesday commentary)
The Railroad Commission's Rule 37 is confiscatory and antithetical to the principles under which this nation was founded. The separate Mineral Interest Pooling Act, if twisted in the way Glenn Johnson and Chesapeake Energy are trying to distort it, will be even worse.
What about the mineral rights of the victims of these predators? A Rule 37 exception just takes their minerals with no compensation whatever.
And in the present economy, is failure to sign a lease going to prevent production of someone's minerals? No!
Why? Because the sales price of gas is too low to recover drilling costs now, and nobody wants to sell their gas in a glutted market anyway. All the investor publications say so.
Chesapeake is filing cases with the Railroad Commission not to facilitate production but to consolidate all the land in a unit cheaply and hold it for speculation.
They are not completing wells and gathering pipelines now. They are posturing on the drilling pads and drilling a few hundred feet and calling that a good-faith effort to produce in order to hold their existing leases.
When the market once again supports profitable drilling and production, perhaps those unleased mineral owners will see a reason to lease.
-- Jerry J. Lobdill, Fort Worth
Anyone who believes Chesapeake Energy is just a benevolent organization that wants everyone to participate in the production of this wonderful Barnett Shale is what I call a fool.
Chesapeake is neither a benevolent nor a philanthropic organization bent on giving money away without any strings attached.
The fact is that the precedent for "force pooling" unleased mineral interests is already outlined in what is commonly referred to as the "Finley Resources" decision from the Railroad Commission (Oil and Gas Docket No. 09-0252373).
Within that decision the Railroad Commission has ruled that if Chesapeake wants to force pool unleased mineral owners it may do so in this way: (1) the owners of unleased tracts within the unit are pooled as owners of a one-fifth royalty and four-fifths working interest, proportionately reduced; (2) the mineral owner's share of expenses, subject to a zero risk penalty, are payable only from the four-fifths of production rather than from their entire mineral interest.
This latest attempt by Chesapeake is to simply reverse the Finley decision with one that is -- again -- in its interest only.
Fools do seem to abound these days.
-- Louis McBee, Fort Worth
2 comments:
People usually have 3 choices on what to do with their Fayetteville Shale Mineral Rights, they could either lease, sell or keep their rights depending on their decision.
In order to make an informed decision, people who own such mineral rights should first read blog posts like these or perhaps talk to several experts first.
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