Chesapeake Business Practices

[tomokc]

Oklahoma is an at-will employment state. You can fire an employee for any reason that isn't a violation of law such as gender, race, sexual orientation, marital status, etc.

What have you heard?

[DoctorTaco]

This is a pretty damning, well-researched article:

Chesapeake Energy?s $5 Billion Shuffle - ProPublica

[Easy180]

This is a pretty damning, well-researched article:

Chesapeake Energy?s $5 Billion Shuffle - ProPublica

That is damning and pretty sick...Not sure if Chesapeake's reputation could get any lower

[PhiAlpha]

That is damning and pretty sick...Not sure if Chesapeake's reputation could get any lower

I'm not saying that what CHK is doing on this is right by any means, but there is a difference between ethically right and legal. it is the landowner's responsibility to negotiate the terms of their lease. If this guy or his attorney didn't negotiate a "Cost Free Royalty" clause into his lease or at least a clause that capped transportation expenses that could be deducted, that is on the landowner. If that clause isn't included, the operator can deduct from their royalty whatever the costs are. This does draw some questions of monopolistic behavior since access was spun off from CHK, but the lease terms generally protect the operator if they exclude that provision. Again, not saying it's right, but I don't think what they are doing to this guy is completely illegal. Sketchy...yes.

While I would be mad at CHK if I were in his position, I would also be mad at myself for failing to negotiate a good lease or failing to request proper help to do so. If you noticed, the article states that lessors who negotiated cost free or limited royalty clauses into their leases were not affected by the change in pricing.


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[Edgar]

Blame the victim, popular with conservatives these days.
Sure makes it hard to be fully behiund the Thunder tuning in and seeing that scoundrel courtside.

[lasomeday]

Blame the victim, popular with conservatives these days.
Sure makes it hard to be fully behiund the Thunder tuning in and seeing that scoundrel courtside.

Edgar. I don't think this has anything to do with anyone's political affiliation, but we know where you stand.

You should always have legal council or someone with experience in that field review all contracts. That is just being an adult 101 nothing to do with political affiliation.

[Edgar]

True that, especially when you're dealing with a greedy despicable human being like McClendon.

[warreng88]

True that, especially when you're dealing with a greedy despicable human being like Ed Shadid.

Fixed it for you...

[Bellaboo]

True that, especially when you're dealing with a greedy despicable human being like McClendon.

Yep, the same man who has given millions to the general public and universities in OKC and the surrounding metro area.

Again Edgar, you have no earthly clue.


The last big donation off the top was $5 million for the Finish Line tower in the Boathouse district. That greedy son of a gun, should have given $10 mil.

[Plutonic Panda]

True that, especially when you're dealing with a greedy despicable human being like McClendon.

Ahhhhh, another person on here jealous of the upper class.... cute. I'll expect to see you standing on a street corner in branding yourself as a freelance hipster that does nothing but complain about rich people not giving enough to the poor.

While I don't necessarily agree with all of his business practices, Aubrey showed he really does care about the community and tried to do great things while building a wonderful campus for the OKC area. It is truly beautiful, if you get a chance, go have a look.

[Plutonic Panda]

Yep, the same man who has given millions to the general public and universities in OKC and the surrounding metro area.

Again Edgar, you have no earthly clue.


The last big donation off the top was $5 million for the Finish Line tower in the Boathouse district. That greedy son of a gun, should have given $10 mil.

10 mil???? How dare you.... he should at least gave a hundred million. Why should he get to live in a huge multi-million dollar house why Edgar has to live in 2,000sf(or less) house? This man owes people money!

[PWitty]

I'm not saying that what CHK is doing on this is right by any means, but there is a difference between ethically right and legal. it is the landowner's responsibility to negotiate the terms of their lease. If this guy or his attorney didn't negotiate a "Cost Free Royalty" clause into his lease or at least a clause that capped transportation expenses that could be deducted, that is on the landowner. If that clause isn't included, the operator can deduct from their royalty whatever the costs are. This does draw some questions of monopolistic behavior since access was spun off from CHK, but the lease terms generally protect the operator if they exclude that provision. Again, not saying it's right, but I don't think what they are doing to this guy is completely illegal. Sketchy...yes.

While I would be mad at CHK if I were in his position, I would also be mad at myself for failing to negotiate a good lease or failing to request proper help to do so. If you noticed, the article states that lessors who negotiated cost free or limited royalty clauses into their leases were not affected by the change in pricing.


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I feel bad for any affected landowners as well, but I completely agree. If you are signing what could potentially be a multi-million dollar contract and you don't take the time to at least have a lawyer read it over beforehand, then you don't really have anyone to be upset with but yourself. Just because there was a clause you didn't understand before you signed it doesn't give you the right to bring a lawsuit after the fact. But these lawyers will gather up enough affected people to bring one because they know the company will most likely settle instead of spending the money to fight it.

[ylouder]

Yep, the same man who has given millions to the general public and universities in OKC and the surrounding metro area.

Again Edgar, you have no earthly clue.

You're not mentioning the very important fact that those were tax right offs.

[ylouder]

I feel bad for any affected landowners as well, but I completely agree.

I agree, its always best to have lawyers review any document but you have to remember the audience.

A large amount of the population see all these feel good commercials that run non stop all day long on local channels and during the news where the oil and gas companies repeat that they are just like us, that they do good in the community, that they care and give back, that they invest here locally and create jobs - and ordinary people see these ads and go into the situation expecting a fare shake. That's exactly why they run these ads to setup this expectation. Just a few years ago people would yell and scream at anyone who dare say a negative thing about Chesapeake or fracing because they were this citys savior.

When in fact large corporations have billions of dollars to work every loop hole (that their lobbyist created) and have buildings full of of lawyers constantly stratigizing how to rip off the landowners; or if you will 'maximize profit for the company'. As you also know in a lot of cases these are usually rural, older, low intelligence people who have led very simple and humble lives and they dont stand a chance. Ordinary people cant go out and just buy up mineral rights anymore, most of these have been past down from generation to generation long before anyone knew what was under their feet.

Just like the theft that happens on wallstreet, just because this type of theft is legal doesnt make it right.

[catch22]

^ What theft on Wall Street?

If I buy something and sell it later at a higher price, how is that theft? If I buy 200,000 things and sell them twenty minutes later for a $20,000 profit, how is that theft?

[ylouder]

I was referring to banks aggressively pushing financial products that they knew were going to fail during the 2008 timeframe which was completely legal. Those same banks and hedge fund managers were pocketing billions of dollars while ordinary people had years of savings wiped away.

Basically - leading someone into a situation where you setup yourself to profit immensely by their lack of understanding and trust in you.

Take the time to read the whole story that was attached, or at least view the graphic titled 'the Chesapeake access deal'. Like others have said, its all legal and insanely clever, but just completely corrupt, ethically and morally wrong how they deliberately screwed the land owners out of millions of dollars.

I've always been a fan of the old saying, 'they got there money the old fashioned way - they stole it.'

[Edgar]

Yep, the same man who has given millions to the general public and universities in OKC and the surrounding metro area.

Again Edgar, you have no earthly clue.


The last big donation off the top was $5 million for the Finish Line tower in the Boathouse district. That greedy son of a gun, should have given $10 mil.

Thank the good taxpayers in Ok still doling out 100's of millions every year in drilling tax credits.

[Plutonic Panda]

Thank the good taxpayers in Ok still doling out 100's of millions every year in drilling tax credits.

benefits outweigh the negatives. All we can do is be thankful we don't live in a world full of people like you who are just jealous of people more successful than you.

[Easy180]

Thank the good taxpayers in Ok still doling out 100's of millions every year in drilling tax credits.

Hard to live without those 10 bucks. I want 'em back!

[Bellaboo]

You're not mentioning the very important fact that those were tax right offs.

Does that really matter if that's a tax write off or not ? Millions are millions.

The end result is a killer boathouse and finish line tower for the general public to use.

[Bellaboo]

Thank the good taxpayers in Ok still doling out 100's of millions every year in drilling tax credits.

Edgar, quite being a sore loser. All that drilling means more jobs and more taxes indirectly.

Quit being a troll.

[Bellaboo]

Thank the good taxpayers in Ok still doling out 100's of millions every year in drilling tax credits.

This is about McClendon. AEP does the majority of their drilling in Ohio.

And I don't think it's a tax credit from the good taxpayers of Oklahoma, it's a reduction as an incentive to drill. For horizontal drilling, they pay 1% gross production tax for 48 Months, then it reverts to the normal 7% for the life of the well, which the shale wells are now being predicted to last 30 - 40 years.

[ylouder]

Edgar, quite being a sore loser. All that drilling means more jobs and more taxes indirectly.

Quit being a troll.

Actually you are being the troll.

[zookeeper]

I feel bad for any affected landowners as well, but I completely agree. If you are signing what could potentially be a multi-million dollar contract and you don't take the time to at least have a lawyer read it over beforehand, then you don't really have anyone to be upset with but yourself. Just because there was a clause you didn't understand before you signed it doesn't give you the right to bring a lawsuit after the fact. But these lawyers will gather up enough affected people to bring one because they know the company will most likely settle instead of spending the money to fight it.

I think a lot of the problem with the leases are the very words used, meaning one thing yesterday and another today. Chesapeake, at least under McClendon, was one of the worst in writing confusing, misleading, and sometimes downright fraudulent leases.

[mugofbeer]

I think a lot of the problem with the leases are the very words used, meaning one thing yesterday and another today. Chesapeake, at least under McClendon, was one of the worst in writing confusing, misleading, and sometimes downright fraudulent leases.

But those who had attorneys look them over first didnt get taken. My parents have a lease with another, more respected firm in OKC and their lawyer had several escape clauses removed from the ckntract before signing.