How are they getting away with all these fees Gathering ,Processing, Marketing

and the rest.When a Lease states Well Head Price?



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What state?

West Virginia

Because gas generally is not sold "at the well head" or at least, that's how the gascos define a sale.  So whatever it is sold for - downstream - involves all the *alleged* costs they incur and by subtracting those costs they then arrive at an *alleged* value at the well head, before it begins it's journey through processing, gathering etc.

BTW this is admittedly my simplistic way of looking at it.  There are many state laws which come into play depending upon what state you are in and how for example the concept of "first marketable product" is interpreted etc.

In West Virginia, "wellhead price" will only help you if there's nothing else in the lease that gives the company the right to deduct costs.  If you've signed a lease during the shale boom, that lease will include language that gives the company the right to deduct costs.  You have to negotiate for a change to the lease if you want no deductions.


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