Royalties

Has anyone seen a big decrease in there royalties since the new law came int effect? We where receiving some nice payments but since this has taken effect they are next to nothing. We did the 2006 act and cleared the title before signing. They said they found an heir in CA and now they are on the title. It started out with Rice now it's with EQT. I don't know if they choked the well back or not, but if we are supposed to receive 50% because we are surface owners we are no where close. I am rounding up all my prior statements for my attorney to review ,but thought I would reach out and see if anyone else has had the same issues 

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Permalink Reply by Robert weaver on January 14, 2019 at 4:25am
What new law?
Permalink Reply by Raymond Speck Jr on January 14, 2019 at 10:51am

I guess I should say ruling from the Ohio Supreme Court  on Walker V Nay ,Corban V Chesapeak , Tribett V Shepherd in Oct 0f 2016

Permalink Reply by G.H. on January 15, 2019 at 4:36am
I don't totally understand what you mean when you say "They found an heir in CA and now they are on the title," but is it possible that they retroactively deducted that heir's royalty payments from what they are paying you?
Permalink Reply by Bullfrex on January 15, 2019 at 8:17am

Some things in your original post are confusing to me:

The found a 'new heir in CA'----you said you cleared the title in 2006?---why didn't this show up in the original title search? Have you verified their search information? Have you contacted your Title Search company for an explanation?

And this---"we are supposed to receive 50% because we are surface owners"---owning the surface gets you nothing except the ability to negotiate a surface use lease, but no royalties---how much of the 'subsurface rights' (OGM) do you own? This determines your royalties.

How old are the well(s)? Declines are inevitable, and if they are reworking the pad for new wells, they would stop production on the existing wells.

If I were doing it, I would do a spreadsheet on all your royalty statements, logging production numbers, NG price, royalty received, etc. before I had an attorney do it for $250/hr. You might find some answers there.

Good luck.

Permalink Reply by Dan on January 17, 2019 at 6:02am

Might it be ORR ( Overriding Royalty) causing lower payment?

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