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Permalink Reply by bungalow_steve on August 13, 2013 at 6:01am

The terms net royalty or gross royalty are too vague, people in PA are getting 12.5% gross at the wellhead and are not happy about it (and suing), but that is what can be interpreted from their poorly written leases.  Should be more specific like royalties based on the gross revenue received from sales in arms length transaction with no deductions.

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Permalink Reply by Garfield on August 13, 2013 at 11:26am

I agree.. these cleverly written leases mean eXactly what they say.. so best read the fine print study the lease over and again with someone who understands legal terms and oil leases.

The Market Enhancement is another way for them to STEAL ROYALTIES.. that's why they offer such an attractive "Carrot & Stick" to get you to nibble, but it's not all about the signing fee!

Some companies "such as Paloma" cleverly disguise even the Surface and Subsurface Damage and include a clause limiting their liability to a mere $3000 per acre. If they aren't responsible enough to pay 100% of their own damages, they aren't drilling on my property till they clean up their lease!

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Permalink Reply by Garfield on August 13, 2013 at 11:28am

I very much doubt a lease can be GROSS when it has a MARKET ENHANCEMENT.. clause!

Very few leases are GROSS.. must stand firm and DEMAND 20% GROSS.. or they'll cheat you out of money for the life of the well.

Some companies also expect us to pay their AD VALOREM TAXES which is another big no no!

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Permalink Reply by Barbara Wood on August 13, 2013 at 11:54am

Thank you and for anyone who has helpful advice!

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