Chesapeake Squeezes Mineral Owners -- Cash Crunch

Link here to Bloomberg.

I blogged about transportation costs a very long time ago related to another story. I doubt I can find that link again. It had to do with natural gas royalties in the Haynesville, if I remember correctly, or it might have been the Barnett. ... Ah, yes, here it is .. I found it on the first "blog search." I'm impressed with the search engine! Back on August 11, 2011 -- more than a year ago -- I blogged about it! Yes, nothing new under the sun.

But here's another reminder for mineral rights owners and transportation costs associated with "their oil."

As gas prices were heading toward a 10-year low in April, Chesapeake began reinterpreting in its favor thousands of contracts with landowners from Pennsylvania to Texas that own the 1 trillion cubic feet of gas the company produced last year, according to interviews and documents reviewed by Bloomberg. Chesapeake, arguing that other contract language allows for cost deductions, is fighting more than a dozen lawsuits.

I posted my initial thoughts at the second link above.

I guess that's the good news for North Dakota folks who have leases with Chesapeake: for the most part they are not paying transportation costs for oil. If they are, it can't be much.