First royalty statement from Antero

Finally received my first royalty statement from Antero (but only for current month, back pay still being processed). 

I was more than a little shocked to see 50% of my royalties going to fees!!!  I expected maybe 25%.

And was wondering why there are two different gathering charges for each well. 

Anyone know why?

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0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on September 1, 2015 at 4:15am

Using the favorite term of the IRS which means SPECIFICALLY, "Generally" I call this theft.

If you are getting a 50% royalty, that's 5 times better than what most landowners are getting.

Shrinking Natural Gas Royalties    September 13, 2013

http://loe.org/shows/shows.html?programID=13-P13-00037

Abrahm Lustgarten of Propublica estimated in 2013 that landowners were receiving 10% of their lease specified royalty.

Example of an IRS use of Generally: If you roll over money from a 401K to an IRA, that you took into your possesion which is older than 60 days, then "Generally" that amount over 60 days old can be approved for roll over to the IRA. Reading the fine print, you must prove the bank made an errror in order to get approval of a rollover that is greater than 60 days old. That is the only way 60 day old money can be legally rolled over into an IRA.   From this you can see that Generally means Specifically. Check it out on the IRS website, and always read further when the IRS uses the word Generally.

Permalink Reply by Adam Martin on September 1, 2015 at 4:21am
Hi Deborah -

What does your lease say regarding Production Costs or Market Enhancement? If you signed a lease that allows for deductions, they could be legitimate deductions, though 50% of your royalty does seem a bit much. My family is leased with Antero and we have a "no deductions" lease so I'm interested to see what your response is. I would also contact their Leasehold Relations folks in Denver and ask to show you an itemized list of what you are being charged for.

As far as gathering charges, could be oil vs gas (not sure where you are located). If they are trucking oil away vs putting gas into a pipeline and sending to a processing plant, there may be 2 different ways they charge you.

Let us know what you find out.

Thanks
Permalink Reply by Deborah Sherrod on September 1, 2015 at 4:58am

Adam Martin -  this is a net lease and it lists several types of deductions, including gathering fees.

It is for natural gas.

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