All Discussions Tagged 'royalty' - GoMarcellusShale.com2024-03-28T10:38:14Zhttps://gomarcellusshale.com/forum/topic/listForTag?tag=royalty&feed=yes&xn_auth=noHelp with royalty rights in Greene County PAtag:gomarcellusshale.com,2018-06-06:2274639:Topic:7792802018-06-06T01:49:39.503ZJoehttps://gomarcellusshale.com/profile/Joe677
<p><span style="font-weight: 400;">A few months ago my aunt, sister, and I each received letters from a company offering to buy what they are calling a combination of “oil and gas rights and non-participating royalty rights” for property in Greene County, PA. It is a total of 44 acres among the three of us.</span></p>
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<p><span style="font-weight: 400;">The letter contained portions of a chain of title (field notes from the company’s title agent) showing that in the 1970s a friend of…</span></p>
<p><span style="font-weight: 400;">A few months ago my aunt, sister, and I each received letters from a company offering to buy what they are calling a combination of “oil and gas rights and non-participating royalty rights” for property in Greene County, PA. It is a total of 44 acres among the three of us.</span></p>
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<p><span style="font-weight: 400;">The letter contained portions of a chain of title (field notes from the company’s title agent) showing that in the 1970s a friend of the family left the rights to my grandparents (who died in the 1980s), and that subsequently the rights now rest with my aunt, sister, and me. (The field notes do not contain any actual language from the wills to show the language used in granting the rights.)</span></p>
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<p><span style="font-weight: 400;">The letter said that if we would like to sell the interest, the company will run a full mineral title of the property to confirm the ownership, and that the offer could increase or decrease, depending on what they find. Further, it says that we would not be under an obligation to sell until we agree on a purchase price.</span></p>
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<p><span style="font-weight: 400;">We were unaware that we owned any rights prior to receiving the letters.</span></p>
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<p><span style="font-weight: 400;">The first letter offered $2,000 an acre. My aunt called the company, said that the offer was not enough, and asked them to send a second offer.</span></p>
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<p><span style="font-weight: 400;">The second offer was for $2,500 per acre. The second letter stated that “The big issue that is preventing us from paying more money is that about 95% of this interest is a non-participating royalty interest. … If you owned more of the executive rights, we could offer you more money.” This second offer was limited to 30 days.</span></p>
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<p><span style="font-weight: 400;">From what I understand, a non-participating royalty interest means that we are not able to force the lease of the oil and gas, and are not entitled to a lease signing bonus. But, if the “executive” holder of the mineral rights ever decides to enter into a lease, and the land is drilled, we will be entitled to a portion of the royalties.</span></p>
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<p><span style="font-weight: 400;">I informally talked to an attorney who said his firm would charge around $10,000 for the title search. </span></p>
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<p><span style="font-weight: 400;">My guess is that the 30 day limit on the offer is a pressure tactic, to force us to move quickly, without exploring other options.</span></p>
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<p><span style="font-weight: 400;">We are wondering if $2,500 is a reasonable price and if not, who could we talk to about getting a better price? (I’m guessing that without knowing the percentage of the royalty rights, an accurate price is hard to judge.)</span></p>
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<p><span style="font-weight: 400;">I have done some research, but all of the web pages I find are talking about holders of full mineral rights. Any information would be greatly appreciated.</span></p> Gross Proceeds vs. Gross Proceeds with Market Enhancement actual royalty proceeds payments statementtag:gomarcellusshale.com,2016-06-03:2274639:Topic:7366052016-06-03T15:55:37.408ZDustyRoadshttps://gomarcellusshale.com/profile/BrianBartlett
<p>Is anyone willing to share information, knowledge and actual deductions which are being taken from them with a Gross Proceeds at the Wellhead vs. Gross Proceeds with the Market Enhancement clause. It would be very interesting and knowledgeable if different lease could be shared for the same pooled area or well to see the actual advantage or disadvantage of gross proceeds at the wellhead vs. the gross proceeds with the market enhance clause. There has to be some quite a few of these pooled…</p>
<p>Is anyone willing to share information, knowledge and actual deductions which are being taken from them with a Gross Proceeds at the Wellhead vs. Gross Proceeds with the Market Enhancement clause. It would be very interesting and knowledgeable if different lease could be shared for the same pooled area or well to see the actual advantage or disadvantage of gross proceeds at the wellhead vs. the gross proceeds with the market enhance clause. There has to be some quite a few of these pooled areas or leases which have a these two different types of royalty structures in place and do a comparison among the pooled area owners.</p>
<p>It would be interesting to see how the gross proceeds price at the wellhead is determined and how it "holds up" or compares to the determined value at the wellhead when the gross proceeds with the market enhancement clause is used.</p>
<p>Can anyone share their actual data or scenerios ? Royalty owners, landmen, producers, or anyone else, this is an opportunity to share you opinions, actual data or knowledge with your partners or future partners in teaming together and benefiting us all.</p>
<p>Thank you in advance for any responses and feedback.</p>
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<p></p> With a Lease Agreement Dispute with O&G Should I Cash their Royalty Checkstag:gomarcellusshale.com,2015-12-16:2274639:Topic:7095502015-12-16T14:41:32.670ZLeo Shttps://gomarcellusshale.com/profile/LeoS
<p>I have a lease in Tyler county, WV, with which an O&G violated. They incorrectly and intentionally miscalculated my decimal interest for the minerals we have leased. Our lease specifies (in black and white) that all of our land and any wells must be included in only one unit (I have it in writing from them that they promised this condition, for which I learned later that all of their drilling platforms are split into two units), but the O&G has split our land into two units. When…</p>
<p>I have a lease in Tyler county, WV, with which an O&G violated. They incorrectly and intentionally miscalculated my decimal interest for the minerals we have leased. Our lease specifies (in black and white) that all of our land and any wells must be included in only one unit (I have it in writing from them that they promised this condition, for which I learned later that all of their drilling platforms are split into two units), but the O&G has split our land into two units. When the O&G sent us the Division Orders to sign, we refused. Two months later, the O&G sent us royalty checks based upon their decimal interest calculation. There was no federal, state, or severance tax withholding.</p>
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<p>Does anyone have an idea what we should do with regards to cashing the checks? I do not want to have the process of cashing imply that I agree with their decimal interest calculations. But if I do not cash them, and the checks expire, what happens? Additionally, I am sure the O&G will report a 1099 to the IRS, for which I will incur a very large tax bill. Will the WV county apply a large severance tax that I would be required to pay?</p>
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<p>Thanks in advance,</p>
<p>Leo</p> Royalty deductions by Gas Companiestag:gomarcellusshale.com,2015-12-14:2274639:Topic:7093152015-12-14T16:48:17.695ZDudley raineyhttps://gomarcellusshale.com/profile/Dudleyrainey
<p>I just received my current statement and EQT is deduction over 33% from my royalties. I knew in the past they took out deductions, but this has become more and more extreme in the past year. Anyone else have a similar extreme deduction from EQT or another gas company? ? ? </p>
<p>Dudley</p>
<p>I just received my current statement and EQT is deduction over 33% from my royalties. I knew in the past they took out deductions, but this has become more and more extreme in the past year. Anyone else have a similar extreme deduction from EQT or another gas company? ? ? </p>
<p>Dudley</p> GMS Sponsor Intro: Packer Thomas, CPAs & Business Consultants for the Mineral Ownertag:gomarcellusshale.com,2015-07-06:2274639:Topic:6836672015-07-06T15:40:12.338ZKeith Mauck (Site Publisher)https://gomarcellusshale.com/profile/marcellus_shale
<p><span class="font-size-3"><strong>Company Name:</strong> Packer Thomas</span></p>
<p><span class="font-size-3"><strong>Phone: </strong>(330) 533.9777</span></p>
<p><span class="font-size-3"><strong>Email: <a href="mailto:skacerski@packerthomas.com">SKacerski@packerthomas.com</a></strong></span></p>
<p><span class="font-size-3"><strong>Website: <a href="http://www.packerthomas.com/industries/oil_gas.php" target="_blank">packerthomas.com…</a></strong></span></p>
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<p><span class="font-size-3"><strong>Company Name:</strong> Packer Thomas</span></p>
<p><span class="font-size-3"><strong>Phone: </strong>(330) 533.9777</span></p>
<p><span class="font-size-3"><strong>Email: <a href="mailto:skacerski@packerthomas.com">SKacerski@packerthomas.com</a></strong></span></p>
<p><span class="font-size-3"><strong>Website: <a href="http://www.packerthomas.com/industries/oil_gas.php" target="_blank">packerthomas.com</a></strong></span></p>
<p><span class="font-size-3"><strong>Social Media: <a href="https://www.facebook.com/PackerThomasOH" target="_blank">Facebook</a><br/></strong></span></p>
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<p><span class="font-size-3">We'd like to welcome Packer Thomas (PT) as GMS sponsor. PT is a accounting and business consulting firm headquartered in Canfield, OH. The below interview is with <span>Steven Kacerski, CPA; a Manager in the Oil and Gas practice division.</span></span></p>
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<p><span class="font-size-3"><strong><a href="https://www.google.com/maps/place/6601+Westford+Pl+%23101,+Canfield,+OH+44406/@41.016304,-80.725651,11z/data=!4m2!3m1!1s0x8833fc7f2e3047b5:0x6142ef18d8e08b7a?hl=en" target="_blank"><img width="300" src="http://storage.ning.com/topology/rest/1.0/file/get/97615343?profile=RESIZE_320x320" width="300" class="align-right"/></a>GMS:</strong> Your website says Packer Thomas was started in 1923. Tell us about the beginnings of Packer Thomas and it’s history.</span></p>
<p><span class="font-size-3"><strong>PT:</strong> Packer Thomas is a regional, certified public accounting and business consulting firm founded in 1923. With a staff of over 50 people, we are one of the largest regional firms in Eastern Ohio and Western Pennsylvania. Packer Thomas has a broad based clientele, including privately owned businesses, agribusinesses, oil & gas and not for profit entities. Our personal client involvement has allowed us to help generations of families achieve financial and business success. It has been our mission to exceed the expectations of our clients by holding our firm to a standard of integrity and achievement that exceeds the usual and aspires to excellence which has led to our success and longevity. </span></p>
<p><span class="font-size-3"> </span></p>
<p><span class="font-size-3"><strong>GMS:</strong> How are you best able to serve landowners involved in the Marcellus and Utica Shale plays?</span></p>
<p><span class="font-size-3"><strong>PT:</strong> We are best able to serve landowners in a variety of ways. Besides providing traditional income tax and accounting services to landowners, we have expertise providing estate, gift and trust services as well as mineral management services for landowners. Members of our team are landowners who are actively involved in the shale leasing process, which gives them a better understanding of how the shale boom will affect landowners both from a tax and a financial perspective. </span></p>
<p><span class="font-size-3">For landowners who have an actively managed farm, we have agriculture expertise as well. Personally, I grew up on a farm and continue to farm this day with a 550 acre grain farm. Being actively involved in farming myself not only gives me the added expertise of understanding the business requirements affecting farmers, but also helps when tailoring tax and estate planning opportunities for their specific operation.</span></p>
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<p><span class="font-size-3"><strong>GMS:</strong> When you say “mineral management services” what does that include? Can you elaborate?</span></p>
<p><span class="font-size-3"><strong>PT:</strong> At Packer Thomas, we have an oil and gas team in place that has the expertise and is ready to help you navigate through the complex areas of oil and gas. Besides helping landowners manage the tax implications of lease bonus and royalty payments, we are excited to offer royalty verification assistance to landowners as well. We feel this is an area of need for many landowners in the Marcellus and Utica Shale. There have been numerous reports and lawsuits the past couple of years surrounding improper royalty payments to royalty owners. </span></p>
<p><span class="font-size-3">A landowner’s royalty statement can be very confusing with all the information presented on it. Our experts will review the statement and give the royalty owner confidence they are being paid according to their lease and not being taken advantage of by the oil and gas producer. In instances where we feel there have been incorrect payments made, we can assist the royalty owner in determining what the payments should have been under their lease provisions so a case could be made against the oil and gas producer.</span></p>
<p><span class="font-size-3"> </span></p>
<p><span class="font-size-3"><strong>GMS:</strong> What do you think sets you apart from other accounting firms and business consultants? </span></p>
<p><span class="font-size-3"><strong>PT:</strong> As a landowner, you want to work with someone you can rely on to have your back and be there for you throughout the years. The fact that Packer Thomas has been around since 1923 serving our clients is a testament to our commitment of exceeding their expectations because without our clients, there would be no Packer Thomas. We offer a wide range of services that can specifically be tailored to each individual landowner’s needs. Everyone’s tax situation is different so we don’t believe in a “one size fits all” approach to planning. Whether a landowner requires royalty verification assistance, income tax planning or other related services, our team will be there along side of them through the years being proactive and producing results for them.</span></p>
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<p><span class="font-size-3"><img src="http://storage.ning.com/topology/rest/1.0/file/get/97615229?profile=original" width="175"/><img src="http://storage.ning.com/topology/rest/1.0/file/get/97615325?profile=original" width="176"/></span></p>
<p> <em><strong>Steven Kacerski, CPA</strong></em> <em><strong>Anna Rogers, CPA CMM</strong></em></p>
<p><em><strong> Manager Manager</strong></em></p>
<p><span class="font-size-1"><em><strong><a href="mailto:skacerski@packerthomas.com">SKacerski@packerthomas.com</a> <a href="mailto:skacerski@packerthomas.com">ARogers@packerthomas.com</a></strong></em></span></p>
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<p></p> Chevron royalty payments are coming in......tag:gomarcellusshale.com,2014-12-09:2274639:Topic:6459462014-12-09T11:03:37.671ZMaryhttps://gomarcellusshale.com/profile/Mary855
<p>Just received our statement yesterday for September 2014 and found that the 'price paid' is only $2.13. Just in April, the 'price paid' was $4.29. I notice that the production is down slightly but they continue to take 16% out in 'cost adjustment' (as expenses, I believe). Can anyone explain why the $2.13 when the Henry Hub hasn't wasn't below $3.40 in September. Thank you. Mary</p>
<p>Just received our statement yesterday for September 2014 and found that the 'price paid' is only $2.13. Just in April, the 'price paid' was $4.29. I notice that the production is down slightly but they continue to take 16% out in 'cost adjustment' (as expenses, I believe). Can anyone explain why the $2.13 when the Henry Hub hasn't wasn't below $3.40 in September. Thank you. Mary</p> The Top 5 Chesapeake Royalty Litigation Trends to Watchtag:gomarcellusshale.com,2014-09-30:2274639:Topic:6287162014-09-30T17:58:59.670ZKeith Mauck (Site Publisher)https://gomarcellusshale.com/profile/marcellus_shale
<p><span class="font-size-3">By <a href="http://gomarcellusshale.com/profile/marcellus_shale" target="_self">Keith Mauck</a></span></p>
<p><span class="font-size-3">Over the last few years litigation arising from Chesapeake Energy’s royalty practices, has reached a tipping point with a number of new suits being filed in the last year and stretching into new legal theories of liability. The origins of this litigation boom against Chesapeake stems from changes in the company’s royalty…</span></p>
<p><span class="font-size-3">By <a href="http://gomarcellusshale.com/profile/marcellus_shale" target="_self">Keith Mauck</a></span></p>
<p><span class="font-size-3">Over the last few years litigation arising from Chesapeake Energy’s royalty practices, has reached a tipping point with a number of new suits being filed in the last year and stretching into new legal theories of liability. The origins of this litigation boom against Chesapeake stems from changes in the company’s royalty calculation, which saw them reinterpreting thousands of royalty agreements beginning in 2012. Among industry observers, this strategy was an attempt partially to mitigate a massive debt burden and cash shortfalls arising out of the 2012 drop in gas prices. Although some experts indicate that, the foundation for this move was rooted in the financial collapse of 2008.</span></p>
<p><span class="font-size-3">As reported previously, the initial wave of litigation saw the company fighting or settling royalty underpayment lawsuits in Texas, Oklahoma, <a href="http://www.gohaynesvilleshale.com/page/louisiana-1" target="_blank">Louisiana</a>, Arkansas, Kentucky, New York, Virginia and <a href="http://gomarcellusshale.com/page/pennsylvania-counties" target="_self">Pennsylvania</a>, areas where Chesapeake leased vast swaths of acreage in the early days of the shale boom. The first wave of lawsuits saw mixed results, with some litigants failing to advance their claims against the company while others were largely successful.</span></p>
<p><span class="font-size-3">One case that illustrates the potential shift toward decisions favoring royalty owners. In the <i>Demchak</i> litigation (Demchak Partners Limited Partnership, et al. v. Chesapeake Appalachia, L.L.C.), Chesapeake has agreed in principle, although still pending Court approval, to pay $7.5 million as part of a settlement with over 1,000 Pennsylvania landowners claiming an underpayment due to the company deducting post-production costs from royalty checks.<a href="http://shaleforum.com/profiles/blogs/the-top-5-chesapeake-energy-royalty-litigation-trends-to-watch#_ftn1" title="">[1]</a> The case involved a class action suit involving several thousand leaseholders and prompted the Pennsylvania legislature to pass an amendment to the “Guaranteed Minimum Royalty Act” signed by the Governor requiring royalty check transparency. According to the law listed as Senate Bill 259, royalty check statements must provide a more thorough accounting of payments and deductions.</span></p>
<p><span class="font-size-3">The second wave of litigation appears to have been spurred on by the success of the <i>Demchak</i> case. In the last year, class action litigation against Chesapeake appeared to be gaining traction. In addition to small leaseholders filing as a plaintiff class, a number of large leaseholders have also advanced litigation with some of the large leaseholders’ cases filed during the first wave of litigation being resolved. It has also seen litigants expanding their theories of liability to include new claims against the company arising from improper deductions from royalty payments. Lastly, Chesapeake has also drawn the attention of Federal Authorities with criminal enforcement measures being launched in Michigan by the Department of Justice. This second wave of royalty litigation marks a new phase in which there will likely be more leaseholder litigants advancing claims and most likely case law in a number of state and federal jurisdictions will likely be shaped by this uptick in litigation. </span></p>
<p><span class="font-size-3">For royalty owners observing litigation trends against Chesapeake Energy, the following cases could be influential on future royalty dealings with Chesapeake and may shape legal doctrine concerning leaseholder rights. Further, as <i>Demchak</i> illustrated this wave of litigation may act as a potential driver behind new legislation at the state level aimed at how royalties are calculated and disclosed to leaseholders.</span></p>
<p><span class="font-size-3">The following list represents five recent trends in royalty litigation against Chesapeake to watch in the next year.</span></p>
<p><span class="font-size-3"><span class="font-size-4"><strong>5. More Small Leaseholders in Filing Single Cases:</strong> <strong>The <i>Demchak</i> settlement may act as a trigger point for small leaseholders to advance their claims.</strong></span> However, some firms have elected to employ the strategy of filing individual royalty claims rather than navigate the procedural requirements of establishing a class action suit. For example, the Texas-based McDonald law firm has reportedly been retained by around 4,000 with the hope of 10,000 signing up by Christmas. These suits against Chesapeake in Texas will likely result in a flood of litigation against Chesapeake, which could prove logistically difficult to defend.</span></p>
<p><span class="font-size-3"><img width="448" src="http://storage.ning.com/topology/rest/1.0/file/get/1214249684?profile=RESIZE_480x480" width="448" class="align-center"/></span></p>
<p><span class="font-size-3"><span class="font-size-4"><strong>4. New Theories of Recovery:</strong></span> In June 2014 a group of Pennsylvania royalty owners have filed suit seeking $5 Million in damages in Federal Court alleging Chesapeake and Access Midstream Partners LP violated the federal Racketeering Influenced and Corrupt Organizations (RICO) Act. This argument takes the traditional royalty claim beyond a matter of contract interpretation to include the allegation that the companies have engaged in a scheme to raise capital by reducing payouts to royalty owners.</span></p>
<p><span class="font-size-3"><a href="http://storage.ning.com/topology/rest/1.0/file/get/1214249700?profile=original" target="_self"><img src="http://storage.ning.com/topology/rest/1.0/file/get/1214249700?profile=original" width="262" class="align-center"/></a></span></p>
<p><span class="font-size-3"><span class="font-size-4"><strong>3. Potential Criminal Cases:</strong></span> On September 10, 2014 a Michigan State Court judge has ordered that sufficient probable cause existed for the company to stand trial on a racketeering charge and 20 counts of false pretenses charges brought by the Michigan Attorney General. The allegations of the case state that the company allegedly defrauded Michigan property owners by cancelling nearly all of its lease agreements when competition dried up.</span></p>
<p><span class="font-size-3"><span class="font-size-4"><strong>2. Developments in Federal Case Law:</strong></span> Two recent federal court decisions this summer coming from the Fifth U.S. Circuit Court of Appeals in New Orleans ruled that Chesapeake could charge royalty owners for post-production costs despite lease provisions, which appeared to state otherwise. This Federal Circuit's jurisdiction includes Louisiana, Texas and Mississippi, potentially affecting Federal and State royalty litigation in these areas.</span></p>
<p><span class="font-size-3"><a href="http://storage.ning.com/topology/rest/1.0/file/get/1214250714?profile=original" target="_self"><img width="400" src="http://storage.ning.com/topology/rest/1.0/file/get/1214250714?profile=RESIZE_480x480" width="400" class="align-center"/></a></span></p>
<p><span class="font-size-3"><span class="font-size-4"><strong>1. Large Leaseholders Suits: Large leaseholders have brought improper royalty deduction claims against Chesapeake recently with a number of these suits being settled for significant sums of money.</strong></span> For example, the cities of Fort Worth and Arlington sued Chesapeake in 2013 settling their claims this August for over $1 Million. The Hyder family, the leaseholder, owns approximately 1,000 acres, brought a claim against Chesapeake in a San Antonio Court winning an award of $1 Million. Billionaire Ed Bass, Trinity Valley School and Texas Health Harris Methodist Hospital Southwest Fort Worth among others have sued Chesapeake over leases covering 3,290 acres in the Northern District of Texas Federal Court. The case is still pending at this time.</span></p>
<p><span class="font-size-3"><img width="500" src="http://storage.ning.com/topology/rest/1.0/file/get/1214251493?profile=RESIZE_1024x1024" width="500" class="align-center"/></span></p>
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<div><span class="font-size-3"><a href="http://shaleforum.com/profiles/blogs/the-top-5-chesapeake-energy-royalty-litigation-trends-to-watch">http://shaleforum.com/profiles/blogs/the-top-5-chesapeake-energy-royalty-litigation-trends-to-watch</a></span></div>
<div><br clear="all"/><hr align="left" size="1" width="33%"/><div><p><span class="font-size-3"><a href="#_ftnref1" title="">[1]</a> <a href="http://www.naturalgasintel.com/articles/99683-pennsylvania-landowners-still-waiting-on-last-years-75m-chesapeake-settlement">http://www.naturalgasintel.com/articles/99683-pennsylvania-landowners-still-waiting-on-last-years-75m-chesapeake-settlement</a></span></p>
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<div><hr align="left" size="1" width="33%"/><div><p><span class="font-size-3"> </span></p>
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</div> Law Suits and CHKtag:gomarcellusshale.com,2014-09-19:2274639:Topic:6250972014-09-19T18:14:36.141Zdaniel cohenhttps://gomarcellusshale.com/profile/danielcohen
<p>I would find a listing of ongoing suits against CHK to be of interest to me. I suspect that others may find suits against other companies of interest as well. Would it be possible/worthwhile to have such a listing on this site?</p>
<p>Dan</p>
<p>I would find a listing of ongoing suits against CHK to be of interest to me. I suspect that others may find suits against other companies of interest as well. Would it be possible/worthwhile to have such a listing on this site?</p>
<p>Dan</p> How much does royalty percent matter when signing a lease?tag:gomarcellusshale.com,2014-05-26:2274639:Topic:5862522014-05-26T19:39:28.922ZDallas Martinhttps://gomarcellusshale.com/profile/DallasMartin
<p>I'm curious to know what affect the royalty percentage has on the total dollar amount gained from a lease. Is there a rule of thumb for how much money is equal to one percentage point? Are we talking thousands, tens of thousands, hundreds of thousands, or millions of dollars? </p>
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<p>The reason I ask is because in my area it's no longer feasible to get 20% (or more) royalties on a lease if I were to sign one today; I might be able to sign for 16-17%. If I were to sign at 16-17%,…</p>
<p>I'm curious to know what affect the royalty percentage has on the total dollar amount gained from a lease. Is there a rule of thumb for how much money is equal to one percentage point? Are we talking thousands, tens of thousands, hundreds of thousands, or millions of dollars? </p>
<p></p>
<p>The reason I ask is because in my area it's no longer feasible to get 20% (or more) royalties on a lease if I were to sign one today; I might be able to sign for 16-17%. If I were to sign at 16-17%, I'd like to know how much I'd be leaving on the table.</p> Average royalty earned = $24,000 per acretag:gomarcellusshale.com,2014-04-24:2274639:Topic:5706562014-04-24T23:25:11.435ZDavid Perottohttps://gomarcellusshale.com/profile/DavidPerotto
<p> </p>
<p></p>
<p>Based on the extraction footprint data we've collected over the years, the estimated life time dollar value of the gas produced by a horizontal unconventional gas well is slightly over</p>
<p>$190,000.00 per extraction acre.</p>
<p> </p>
<p>If the minimum royalty percentage of 12.5% is applied to this per acre dollar value, the estimated lifetime royalty payments for an extraction acre (an acre of shale from which all available gas has been extracted) is slightly less then…</p>
<p> </p>
<p></p>
<p>Based on the extraction footprint data we've collected over the years, the estimated life time dollar value of the gas produced by a horizontal unconventional gas well is slightly over</p>
<p>$190,000.00 per extraction acre.</p>
<p> </p>
<p>If the minimum royalty percentage of 12.5% is applied to this per acre dollar value, the estimated lifetime royalty payments for an extraction acre (an acre of shale from which all available gas has been extracted) is slightly less then $24,000.00</p>
<p> </p>
<p>The extraction acre production and royalty estimates are based on these criteria:</p>
<p> </p>
<p>- Lifetime total well production of 4 billion cu/ft</p>
<p>- At the wellhead (ATW) gas pricing of $3.35 per Mcf</p>
<p>- A horizontal drilling bore 6,000 feet in length</p>
<p>- one-eighth royalties based on ATW pricing values</p>
<p> </p>
<p>These estimates will vary significantly if any of the assumptive values are changed. It's worth noting that our research indicates that the estimated life time well production value of an unconventional gas well varies significantly depending on the source.</p>