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Permalink Reply by Dott on June 30, 2018 at 11:42am

To keep royalties low, companies sometimes set up subsidiaries or limited partnerships to which they sell oil and gas at reduced prices, only to recoup the full value of the resources when their subsidiaries resell it. Royalty payments are usually based on the initial transaction.  Chesapeake is known for this.

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Permalink Reply by Kevin McKnight on June 30, 2018 at 3:47pm

Wow - doesn't seem like that should be legal.  Thanks for the info!

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Permalink Reply by David Allen Lilly on July 1, 2018 at 2:47am

There are many reasons this is happening, I would not be in a hurry to suggest they are ripping you off although it is a possibility. It would be nice if every unit had a group of its participants who pooled their resources and hired an attorney to help them in situations such as these, so you and we know what is really happening.

I believe that if you have a glut of gas coming from a particular area it will suppress prices if the processor has more than they can sell. 

I wish you the best of luck, please keep us informed if you find any additional information.

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