Any one receiving royalties without any deductions?

Just wondering, I know people have leases that state no deductions, but is anyone getting a royalty check = royalty rate * gross market proceeds, period!

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Permalink Reply by Schnoozie on June 14, 2012 at 9:49am

ladies and gentelmen:

Please Google.....Conjecture

Then apply to entire thread. Have a swell day.

Permalink Reply by matthew h mcsparren on June 13, 2012 at 11:19am

Frank: If you think that a production co. is going to make things right with you or and other land owner , you are thinking foolish! Use your right to audit! Most gas measurement from the well head is done by orfice plate measurement. Just a few ex. of poor measurement / dulled plate 12.7% error / backward plate 20% error /fluid in meter tube 11.3% . All these % of errors work in the production co. favor, large amount of royalty payment.  Most no ductions clause do not clearly state no transportation or compresson fee after sale to third party, this also can ducet a large % of your royalty payment. Respectfully retired Sr. gas measurement tech.

Permalink Reply by Frank Walker on June 13, 2012 at 11:53pm

Matthew, thank you.  I appreciate your input and respect your expertise.  I acknowledge my lease might not cover all the bases.  I don't have this stuff committed to memory and I leased a while back, so I went and re-read my lease.  Here are the deductions that are specifically excluded:

Transporting, marketing, storing, separating, treating, compressing, dehydrating, producing, gathering, processing.  Lease also states neither direct nor indirect deductions are permitted to be imposed on me by Lessee.  This stuff is in the Addendum to my lease, not in the lease itself.

Now on the issue of metering, which is your special area of expertise:

I surely agree with you on this.  And my lease is very weak on metering specifics.  Point is, though, I'm a small time player with well under 100 acres.  If I owned a couple thousand acres I'd be all over this because it would pay me.  But under the circumstances I have to consider my gasco would oppose anything I tried in court.  Like I wrote I live in PA, so we are talking about the PA court system.  Matthew, to be completely honest I don't have a lot of faith in the PA court system.  I can see a lot of my time and money going into any action against a gasco behemoth.  Then, even if I won, they would appeal.  It's a process that could go on nearly forever.  I want no part of that.  It's worth money to me not to be in court or spend my time that way.  I don't even want to be around the kind of non-productive people you find in courts.  I prefer people who work for their living.    

And besides, there is no evidence whatsoever I'm being cheated in the first place.  My gasco has drilling units stretching for miles and miles all around me.  All my neighbors are in situations just like mine.  Nobody is filing any lawsuits.  I guess we're just not litigious people here where I live.  If we're all stupid fools, it's a widespread malady.

Finally, again:  I've been collecting royalties for a while now.  I have never been charged a deduction of any kind.  I don't know what else to write.

 

Permalink Reply by Jim Litwinowicz on June 14, 2012 at 1:47am

Frank: I would suggest getting together with other landowners in the same unit and share the cost of an audit. And if discrepancies appear, you could all share in any legal costs incurred to correct those issues.

You may not find any problems. There are good companies out there. But doing the audit gives you peace of mind and sends a message to the gasco that you will be diligent.

Permalink Reply by Frank Walker on June 14, 2012 at 2:19am

Jim I appreciate your view and respect your thinking.  I'm certain you are aware this is a highly personal thing.  Some individuals are quite concerned about matters of this nature.  The idea of being cheated eats at them more than it eats at myself and my neighbors.

You are aware I'm sure of the cheating (by gascos) cases which have been litigated here in PA in recent years.  The publicity was reasonably intense.  The companies were forced to pay up in the end.  I fully anticipate seeing more instances of cheating in the years ahead.  They will eventually be litigated and settled.  Meanwhile I will be enjoying myself, unconcerned with such issues.  It's just how I roll.  I'm not advocating my approach for others.  I think your group audit idea is a good one for those with concerns.  I might even join such a group.  But I would not initiate or spearhead such an activity.

I do strongly support your thinking about choosing carefully your Lessee.  I did that prior to signing my own lease, and I worked very hard on the lease itself.  Now it's time to enjoy the fruits of my efforts.  

Permalink Reply by Schnoozie on June 14, 2012 at 2:42am

How about the county and township then, where the well was drilled. Out East of course. The name of the Company who gave you this sweatheart deal might be something good to share with everyone here. Good for everyone.

Permalink Reply by Jim Litwinowicz on June 14, 2012 at 2:48am

Frank; your one cool dude. Good that you appreciate what ya got instead of driving yourself crazy worrying over every penny. Hope that I would be so wise...

Permalink Reply by Frank Walker on June 14, 2012 at 6:22am

Ha Ha  Thanks, Jim!  That's pretty funny.  I'm not cool.  And I'm not much of a dude.  I'm just an average landowner doing the best I can.  But I really enjoyed your prop anyway!

Permalink Reply by Schnoozie on June 13, 2012 at 9:04am

 

Dear Frank, From what well or unit does your royalty check come from? 

Permalink Reply by Frank Walker on June 13, 2012 at 9:50am

Probably unintended by you, but this is far too invasive of my privacy for me to answer.  I mean, do you also want my home address!  Ha Ha

Seriously, the other guy won't even tell us what STATE he lives in.  Not even when doing so might actually benefit him.  And you want to know exactly where my land is!  Geeez!

 

Permalink Reply by Schnoozie on June 13, 2012 at 9:58am

Dear Frank, Your name is not Frank.

You live in PA. and you don't have a well on your property or are part of a unit.

 

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