How much are deductions draining your royalty check?

We seem to hear alot about Chesapeke siphoning off alot of deductions from royalty checks. How are the other gascos treating their landowners? Shell , Range , Hilcorp , Chevron , etc. , etc.?

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Permalink Reply by David Allen Lilly on August 30, 2016 at 12:40am

One well George, I don't know if it was at the well head but I am sure it was only the Utica/Point Pleasant. He said he believed the royalty was for oil, wet gas and dry gas.

Permalink Reply by Charlotte Batson on August 29, 2016 at 1:50pm
What does your mineral lease say? Are those deductions authorized in your lease? If so, then you gave them permission to do that. If not, then you have a legal case.
Permalink Reply by Charlotte Batson on August 29, 2016 at 1:51pm
What sorts of things are they deducting?
Permalink Reply by st. croix on August 30, 2016 at 11:26am
The gross check should be about $15,000 a month but the net check is abou $1,800. We are dealing with stat oil in Monroe county.
Permalink Reply by Albert Russell on August 30, 2016 at 2:00pm

Any deductions involved?How many acres are involved? Did you lease on gross or net?

Permalink Reply by David Allen Lilly on August 31, 2016 at 12:01am

When you say "gross check should be about $15,000 a month but the net check is about $1,800", we have no idea what that means because you haven't told us if that is per acre and if not how many acres does it cover ?

We need some formula to use in reporting the royalty amounts that includes both the price receiver per acre (gross and net would be nice) plus an idea of how open the well is.

If production is tightly restricted it will lower your royalty amount. I noticed that a few weeks ago when the oil market dropped to the $41 a barrel range there were very few trucks by here. Soon as the prices recovered the traffic picked up. There is a gathering facility down the road from me that serves 4 units and there is a well directly across the road from me with 8 laterals.

Permalink Reply by alexandra on August 31, 2016 at 5:49am

You don't need to know anything except just about every company is now following Chesapeake's example and taking over 90 to even over 100% of landowners royalties for post production costs.  This is because Pennsylvania's politicians and the legal system is allowing them to do so.  Maybe some of the post production costs is payoff money.  Do we know.  No we don't.  Are these costs valid.  Who knows.  But you want the landowner to tell you?  What a joke this whole thing is.  And people like you act like this is somehow on the up and up?  Good luck getting answers about criminal activity.

Permalink Reply by David Allen Lilly on August 31, 2016 at 11:25am

Your comment was not helpful.

We are trying to discuss royalty deductions, if they are valid or allowed. The comment I responded to was to vague to be of any assistance, so I respectfully asked for more information.

Why did you feel the need to butt in, especially when it appears you have nothing of substance to contribute.

And, you are wrong. I know too many people whose actual experiences are counter to your contentions.

And, I am in Ohio, and unless I missed something I believe the person I responded to is in Ohio, Monroe county.

Permalink Reply by RB on August 31, 2016 at 6:15am
There is a law, they can take no more than 12.5%
Permalink Reply by RB on August 31, 2016 at 6:19am
Meant absolute minimum royalty 12.5%
Permalink Reply by Marc Fournier on August 31, 2016 at 6:41am

Not true.  Enhancement costs are allowed and PA legislature will not fix it.

Good reading on it here - http://marcellusdrilling.com/2016/08/pa-landowners-drillers-fight-o...

Permalink Reply by Larry Livengood on August 31, 2016 at 8:16am

The problem is, in the article they say "Drillers, on the other hand, say that signed contracts with specific terms spelled out are signed contracts–you can’t just nullify signed contracts with a new law." which is true.  They are taking the deductions when there are NO provisions for deductions in the contract.  

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