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Royalty Owners Brochure_Fall 2011

Royalty Owners Brochure_Fall 2011

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Published by Alex Altman
I wrote each of the articles in this brochure.
I wrote each of the articles in this brochure.

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Published by: Alex Altman on May 03, 2013
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ROYALTYOWNERS

A MINERAL OWNER’S GUIDE TO A BETTER QUALITY OF LIFE

C H E S A P E A K E

E N E R G Y

F A L L

2 0 1 1

The

BENEFITS

OF ROYALTIES
03 05
Minerals Helped Start Long-Awaited Family Matt and Christy Downey Paying it Forward James and Sandra Whittenburg Chesapeake is the Way to Go Michelle and Elias Castellanos Neighborhood Land Value Runs Deep Scott and Tammy Neystel

A MINERAL OWNER’S GUIDE TO A BETTER QUALITY OF LIFE

07 09
So far in 2011, Chesapeake Energy Corporation has paid out $164 million in natural gas royalties in the Barnett Shale. Last year alone, Chesapeake distributed $252 million in royalty payments. The current royalty payout in the Barnett to date is more than $1.34 billion.

Confidence Gained Through Results Gene and Julie Dimock

Crowley Enjoys Field of Dreams Richard Mattinson

Royalties Help the Entire Community Jack and Janice Loggins

Learning from Experience Martha and Cruz Hernandez

Royalties Make Vacation Home a Reality Laura and Alfred Distefano

www. A s kC h e sa p e a ke.co m /B a r n e tt

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Minerals Helped Start Long-Awaited Family
“The bonus payment we got from signing our lease really helped us underwrite the expenses of this. The money allowed us to pay almost all of the adoption fees.”
—Matt Downey

03
Some things are well worth the wait. Such was the case with Matt and Christy Downey of Arlington. Their patience during an adoption process, coupled with an unexpected but welcome leasing bonus from Chesapeake, literally helped bring their new family together. The result was that the Downeys could proceed with two adoption plans. The couple adopted Olivia as a newborn in January 2008. About 14 months later, the adoption from China was finalized, and 7-year-old Jonathan entered their lives. “He is happy, healthy and proud to be a part of our family,” said Matt. Although the two adoptions were expensive, they proved priceless. The couple was able to use their leasing bonus from Chesapeake to pay a significant portion of the adoption fees.

Soon after submitting their application, the Downeys were approved as adoptive parents. And while the couple could hardly wait to meet their new little boy or girl, unexpected delays in the adoption process hindered their timetable and tested their patience. Although the lengthy delay was disappointing and frustrating to the Downeys, they remained committed to waiting for their new child. They weren’t, however, willing to wait any longer to become parents. Matt and Christy decided the best solution was to add yet another member to their family — something they previously had no intention of doing. “The wait was getting longer, and we weren’t getting any younger,” said Matt. “We had been waiting a couple years for our adoption to take place. So in the interim, we actually decided to adopt a baby girl from California.” The China Center for Adoption Affairs usually doesn’t allow adoptions when another one is already in progress, Downey said. “But because the wait had gotten so long, they let us do a parallel adoption.”

Proud parents Matt and Christy Downey share a moment with children Olivia and Jonathan.

When Matt and Christy Downey moved into their home in 2002, they didn’t really give much thought to mineral rights on their property. So six years later, when the couple discovered Chesapeake Energy was interested in leasing mineral rights on properties in their Arlington neighborhood, their excitement was tempered by a lingering doubt about whether they had obtained those rights. “My first thought was, ‘I can’t remember whether we got them when we closed on our home,’ ” Matt recalled. “I suspected that we hadn’t and that we were going to be the odd family out in our neighborhood,” Matt said. “But as we investigated, we found out that, lo and behold, we did have mineral rights.

“As it turned out, the money was absolutely needed,” Matt said. After confirming their mineral ownership and learning about all the potential future benefits of being a Chesapeake lessor, the Downeys decided to lease their minerals to the company in 2008. It proved to be a wise and fateful decision. When the bonus check arrived for the Downeys, the timing could not have been any better. For years, Matt and Christy had wanted to adopt a baby from China. Finally, they decided the time was right to adopt and filed paperwork with the China Center for Adoption Affairs.

“I never anticipated getting a leasing bonus; it was not something that was on the horizon for us. And I absolutely would never have expected it would have helped us pay for the adoptions the way that we did.”
—Matt Downey

ROYALT Y OWNERS • FALL 2011

03

Payi n g it For ward

Chesapeake is the Way to G O

05

N eighborhood
Land Value Runs Deep
Scott and Tammy Neystel remember the day they learned there was something special about the land they were about to acquire in Fort Worth’s Riverside neighborhood. Back in 1988, Scott said he didn’t give much thought to having mineral rights on the property. “Then 13 or 14 years later, here comes the natural gas industry.” Today, their royalty income helps the Neystels pay taxes and insurance.
James and Sandra Whittenburg used the initial income from their minerals to help a friend in need.

Scott is happy that others throughout the nation are benefiting as well.
Parents Elias and Michelle Castellanos, center, with children, from left, Michael, Ellison and Danielle, along with grandson Joseph.

James and Sandra Whittenburg may have been the names on the check, but it was another pair of individuals who benefited from the couple’s Chesapeake leasing bonus. Those two people, James said, simply needed the money more. James recalled details of a serious head-on automobile accident five years ago involving Sandra’s work colleague and 2-year-old daughter. Both escaped without suffering long-term injuries, but had to spend several days in the hospital. Using their bonus check, the Whittenburgs subsidized their medical expenses.

“They needed help, and we were lucky enough to be able to provide it.” —James Whittenburg
The Whittenburgs, now retired, have no regrets about not keeping the bonus money for themselves — especially since they are now collecting royalties. “The last few years we’ve used them to help pay our property tax,” James said of his royalties, “which has saved us from having to dip into our own pockets.”

Thousands of families across North Texas are in a position similar to Michelle and Elias Castellanos, who are benefiting from natural gas production right under their feet. In exchange for allowing gas producers like Chesapeake to develop their minerals, property owners receive royalties, or a share of the profits that the natural gas yields. “They are helping us financially as we put our daughter through college,” Michelle said of her royalties. “They are also helping us with bills here and there.” “I keep saying, ‘This is the way to go, Chesapeake is the way to go,’ ” she said. “I love the personnel and the people there.”

“It’s real important for the country,” Scott said. “It puts more Americans to work if we can produce more of our own energy here.”

Scott and Tammy Neystel.

ROYALT Y OWNERS • FALL 2011

05

Co n fid e n ce G a i n e d Through Result s

Crowley Enjoys Field of Dreams

07

Julie and Gene Dimock enjoy the many benefits of being royalty owners.

Athletic Director Richard Mattinson said royalties keep Crowley playing fields in top condition.

For years, Gene and Julie Dimock had wanted to benefit from mineral development under their Joshua home. But due to a challenging geological formation under their property, some natural gas producers were reluctant to get involved. “Other companies said they couldn’t drill here because of what was under our land,” said Gene. “But Chesapeake didn’t have a problem with it.” As proponents of the natural gas industry, the Dimocks were eager to join the thousands of North Texans reaping the benefits of mineral development.

“Chesapeake was like a godsend. We leased to them and they drilled. It really gave me a lot of confidence in the company.”
—Gene Dimock

The underground natural gas reserves of the Barnett Shale manifest themselves in positive ways above the surface, too. That’s evident on the playing fields of the Crowley Youth Association. Royalties have helped the Crowley Youth Association keep its athletic fields in top shape. “When we get them, they are an extra gift that helps us purchase things on our wish list,” said Athletic Director Richard Mattinson. Royalty income has helped with the costs of new scoreboards and landscaping materials to improve the quality of the playing fields. Benefiting as a result are 700 young athletes who participate in the association’s football, baseball, softball, basketball and cheerleading programs. For some athletes, the benefits of royalties have a direct impact, Richard said, adding that scholarships have even been offered for some athletes who might not otherwise have the opportunity to play. “This spring, we used royalty money to award scholarships to 10 baseball players,” he said. “We don’t want to turn kids away for financial reasons, so we have a format in place to offset the costs for families who need the help. Royalties allow us to do that.”

Royalties have helped the couple preserve their retirement savings and even helped with the purchase of new vehicles. “We couldn’t be happier,” said Gene. “Chesapeake has really been great to us.”

ROYALT Y OWNERS • FALL 2011

07

Roya l t ies H elp th e Entire Communit y

Learning f rom E xp e rie n ce

09

Royalties Make
Vacation Home a Reality
The beautiful Florida Panhandle has proven to be an ideal getaway destination for Laura and Alfred Distefano. They have been visiting the area for years, and after much deliberation, recently decided to invest in property there. The income the Distefanos receive from mineral development under their Fort Worth residence inspired confidence to purchase the vacation home. Royalties also helped them furnish the new place.
Jack and Janice Loggins, with niece Natasha. Jack is a proponent of energy independence.

“They kind of fell into our laps,” Laura With their cost of living increasing and retirement reserves shrinking, royalties provide muchneeded relief to many retired families. This is especially true when they are responsible for supporting an additional family member, as is the case with Jack and Janice Loggins, who are raising their teenage grandniece.
Cruz and Martha Hernandez credit Chesapeake with helping them learn about the natural gas industry and the benefits that result for North Texans.

said of the royalties. “It’s something we didn’t have to work for, and we were lucky enough to be able to work with Chesapeake.”

The economic benefits of royalty ownership have offered Martha and Cruz Hernandez some financial flexibility and the opportunity to learn more about natural gas.

“I’m retired and so all money is very beneficial to us.” —Jack Loggins
Jack, who was a traffic engineer for the City of Arlington for 23 years, contends that everyone in the region should share his appreciation for the natural gas industry. At a time when the economy is ailing and crude oil prices are in flux, natural gas offers an economical alternative for fuel that he says should be embraced.

While the royalty revenue the couple receives from Chesapeake has been rewarding, the knowledge they have gained from the company has been invaluable.

“The royalties help the entire community. We have identified natural gas here, and it would be a shame if we didn’t go down there and get it. We need to reduce our need for foreign oil.”

“I’ve been very pleased with the services and everything we’ve gotten from Chesapeake,” Martha said. “And I’m definitely happy to have everything
Royalties give Laura and Alfred Distefano more quality time to relax at their favorite vacation destination.

—Jack Loggins

these little wells decide to produce.”

ROYALT Y OWNERS • FALL 2011

09

Meet more royalty owners by visiting www. AskChesapeake .com/Barnett/RoyaltyOwners.

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