Comment

Comment by Henry J. Cittone on February 25, 2012 at 1:08am

can anyone recommend an attorney to review the division order?  we expect to get ours soon, as our unit was pooled with an effective date of 8/16/2011.

Comment by Brian Powers on January 21, 2012 at 11:09am

As stated in other posts here, the lease operator will have to file well construction and completion data with state authorities as well as periodic production and well test data. The orifice meters used to quantify gas sales volumes also have to be periodically inspected and calibrated.  These are public data and can/should be used to reconcile royalty your check statements. I would never cash a check without verifying the  accuracy of the sales volumes used togenerate the royalty amount. It is also worth  remembering  that gas is sold by its heat content (BTU's or therms) and not by its physical volume alone.

Comment by James Kerns on August 28, 2011 at 11:11pm

If your well is the one i think it is, a close friend of mine who works in the industry told me they have recently started fracking the well and it will be online and in production soon, WOW u have a center stage seat to the creation of local money and jobs, enjoy the view! i mean that, especially if you are part of that drilling/ lease pool.

Comment by Carol M. on July 25, 2011 at 11:37pm

You can hire a professonial to audit your royalty checks.

Comment by Chip Snyder on July 21, 2011 at 12:51pm

Retain your royalty check stubs! It has all of the information you should need. Without it you will have a hard time verifying or arguing your royalty payment. The American Royalty Council has a tutorial. http://www.americanroyaltycouncil.com/
Also, I have been advised recently by an attorney to NOT sign a division order before consulting an attorney who specializes in gas. She claims that some companies will make subtle changes in the division order that can affect your entire lease. If you would like more information concerning royalty payments, financial planning/wealth management or just a really good accountant you can contact me directly at csnyder@epix.net

Comment by MaryJane Reynolds on July 21, 2011 at 12:02pm

Glad you are aware you must monitor calculation and payment of royalties.   You can get alot of helpful information form your lease and from the state.

You lease will give you certain rights to an accounting from the producer. Most likely your lease permits you to have the producer meter calibrated periodically.

You can also get helpful information from the state.  Producers must file well completion data, and production reports which give total volume production.  (If you are pooled the reports to the state will include lots more than the information on your gas).  

 

Based on the leases that I have seen, one of your major concerns will be to audit the deductions from the lease.  payments.  There are numerous ways to over-allocate expenses to deduct from the royalty payment.  One of the most serious tactics is to recover ALL operating costs from the royalty owners, as opposed to the percentage of operating costs that reflects your royalty interest.  In many ways,the very low royalties being paid for Marcellus gas are unfair.  But, since you are getting such a low royalty percentage you must be certain you are paying an equally low portion of the operating costs of the well.

 

Good luck,

MaryJane Reynolds

 

 

Comment by daniel cohen on July 21, 2011 at 10:10am

Dear Brett,

An excellent question. I'll be following your blog carefully. Thank you for raising the issue.

Dan

Comment by Joseph L. Kuhn on July 21, 2011 at 9:38am

I just read your comments and was hoping to read any responses but it appears you have none Right/

Joe K