Another question about royalties

I just received my first royalty check after signing division orders on Friday. I am kind of appalled. I know it varies, but can anyone give the price per acre being brought in after all the deductions? Mine is less than $100/acre.

I'm with Rice and this wasn't quite a month's worth but think it's really low. I'm aware that it depends on several things and understand that the price of gas is really low now.

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Permalink Reply by G.H. on July 13, 2016 at 10:20am

That is my only hope!  That hopefully if he wins he will surround himself with good people.  Really wish the Republicans had been able to put up a different candidate I could get behind...

Permalink Reply by David Allen Lilly on July 13, 2016 at 12:16pm

There are a million variables that make it impossible for any of us to know if you are getting what you should have.

Lease terms are the killer, but you also need to figure quantity and market price, which will be lower than what is quoted on the top of this page.

There are only two ways I know to verify your royalties are what they should be, a lawyer or CPA who have folks who know how to audit your statements.

It may not be worth it to you if you have minimal acreage.

Even when oil was much lower there were folks around here (eastern Guernsey county) who were getting $400 an acre per month, with net leases.

Permalink Reply by justme1 on July 13, 2016 at 12:55pm
Thank you for the info. I was not asking anyone to verify if my royalties are correct. I just wanted to know the amount per acre so I can compare. I know there are several variables involved.
0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 13, 2016 at 3:07pm

JM,

      Domestic Oil & Gas Companies have a history of short changing landowner royalties.

Chesapeake leads the way and the rest follow.

Find a Class Action lawsuit against your producer. If you can't find one, file one.

People will talk, but very few will take legal action, which this calls for.

I noticed the Friends of Oil & Gas are commenting on this discussion. Ignore them, they throw up a smoke screen to keep landowners from taking legal action against their employers.

Permalink Reply by David Allen Lilly on July 14, 2016 at 1:05pm

Mr. Hale,

I read your comment and went back and read the comments previous to yours. I am not able to pinpoint who the "friends of oil and gas" are.

Would you please enlighten us sir ?

Permalink Reply by Thomas Rockwell on July 14, 2016 at 6:10pm

It is worthwhile to remember that eastern Guernsey county is heavy on the oil.  Even the old Oxford leases (my benchmark for a lousy lease) paid gross on oil, so the terms of the lease has less effect in an oil-rich area.  It seems like it is when one gets into gas and wet gas that "enhancement clauses"  can really come into play for the producing company.

I also heard numbers (from reasonably reliable sources) coming out of eastern Guernsey when oil was at $100.  Some of those numbers hit $2,000/acre for the early months.

Permalink Reply by David Allen Lilly on July 15, 2016 at 1:24am

I heard numbers higher than that for our area back when oil was cranking.

I am trying to help people understand that whatever your particular situation is that it may not apply everywhere. In most cases there are so many variables with lease terms and production volume you just can't assume that one thing holds sway over an entire area.

You are correct about the oil here. The royalties we are seeing reported on this site could be in "dry" gas areas from wells where production was choked down because of the very low prices for natural gas within the last year.

Gas has gained a third in value from what it was within the last year if I remember correctly.

I was one of the few who stayed away from the old Oxford lease, finally having to tell them to quit calling me and stopping here at the house.

Permalink Reply by Guernsey 4Life on July 18, 2016 at 3:59pm

Yes, there are a lot of variables and it seems like it can change a lot within a relatively small geographical area.  And gas definitely seems to be the royalty killer because of processing/enhancement fees and deductions.

Permalink Reply by David on July 14, 2016 at 12:11am
I personally would like to see someone show me anybody that's getting $400 an acre right now. Yes I do have acreage in the play no I have yet to see anybody saying they know people who are getting $400 an acre in the play actually show a statement. What I'm trying to say is I don't believe anybody in this market is getting $400 an acrein 2016
Permalink Reply by Guernsey 4Life on July 14, 2016 at 2:59am

I have to agree, $400/ac (I assume you are talking about monthly) seems like a lot for these prices even if you are in the best of areas.  Doesn't seem like it would have been a stretch 2-3 years ago though.

Permalink Reply by David Allen Lilly on July 14, 2016 at 1:01pm

It was in the Pora unit. There are many around here who have dome very well. When prices were higher people were getting much more. Many posted the amount per acre a while back, I think on the Millwood township thread.

We'll see, I have acreage in a producing well and will be getting  a check around Christmas.

I have friends whom I trust in the same unit who have different lease than mine, we will share the information when the time comes.

Lease terms are a huge determining factor in all of this.

The guy I quoted in an earlier comment, I trust him to have told me the truth, but I didn't see it with my own eyes, he could have fooled me but I doubt it.

Permalink Reply by David Allen Lilly on July 14, 2016 at 1:23pm

Additionally, what unit are the folks in who you are familiar enough with to know their royalty amounts per acre ?

This information is most helpful, but only as a starting point. There are so many variables that go into royalty payments.

Can you ask these folks you are familiar with what their last check was worth in dollars per acre ?

I am assuming you are both in Guernsey county, I am too, in Millwood township on Putney Ridge road.

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