ROYALTIES

IF I OWN THE LAND AND MINERAL RIGHTS WHERE THEY PUT THE PAD DO I GET ROYALTIES FROM EACH ADDITIONAL WELL DRILLED?

 

 

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0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 8, 2012 at 9:43pm

Billy...

on that link you provided

http://thedailyreview.com/news/chesapeake-energy-describes-adjustme...

(and thank you for doing so) regarding Chesapeake reducing royalties...

Chesapeake wrote, "These are costs incurred beyond the wellhead after the gas is ready for sale or use. Opinions varied on this issue as it had never been decided in Pennsylvania

do you know if these  costs they are speaking of are considered 'enhancement costs"

I have a 'gross' royalty contract where no post production costs should be deducted but there is what is called a 'market enhancement clause' which sorta contradicts the gross royalty clause by stating that 'enhancement costs' shall be deducted out of Lessor's share of royalty (which I wonder if they mean the entire enhancement cost?).

 

What I am also trying to understand with this discussion and with that link above...With Pa. and other states requiring that the landowner (lessor) receive a MIN. amount of 1/8 royalty (12.5percent) how is it that with post production costs they can give a check lower than the minimum to those with a 12.5% royalty at NET?  that would lower the state required min. royalty amount.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 8, 2012 at 11:47pm

hey...I want to thank the people that showed up on this discussion and shared royalty info with us...we really need that kind of input here at gomarcellusshale to help make decisions and have more knowledge/wisdom to work thru all of this.

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