How much are deductions draining your royalty check?

We seem to hear alot about Chesapeke siphoning off alot of deductions from royalty checks. How are the other gascos treating their landowners? Shell , Range , Hilcorp , Chevron , etc. , etc.?

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Permalink Reply by MaryJane Reynolds on July 23, 2013 at 6:58am

I do not know the corporate affiliations. However, if AMs is an affiliate of AMS, you will need to look closely at the gathering charges to see if they are overstated (because they are gong to an affiliate).   Too early to claim fraud, but you definitely need to start asking for information.

Permalink Reply by Larry Livengood on July 23, 2013 at 8:55am

Three card Monte   Chesapeake style

Permalink Reply by Trapper on July 16, 2013 at 12:45am
It would be nice to see figures to back up all the griping and speculative trash talking towards the gas & oil companies that we are bombarded with daily.
Thought I would give it a try. Solid information is what we seek and are starved for.
Permalink Reply by John Harrison on July 16, 2013 at 2:06am

At the end of this article on deductions taken by Chesapeake in Bradford County, PA is the actual royalty statement from a landowner. This provides a good look at how bad it can get.

Royalty Statement at the end of Article

Permalink Reply by Larry Livengood on July 23, 2013 at 7:03am

The solid information is that I know what my lease states in plain English.  No trash talking needed.

Permalink Reply by David Allen Lilly on August 28, 2016 at 1:48am

Trapper,

I have been largely saying the same things for a long time here. Also, no one can paint with such a broad brush, there are many determinates that are not across the entire shale play which means your situation and mine will most likely be very different.

Permalink Reply by Larry Livengood on July 16, 2013 at 3:59am

Chesapeake withheld 16.52% this month in Gathering fees.

Permalink Reply by David Allen Lilly on August 28, 2016 at 1:49am

Does your lease allow this ? My lease specifically denies them this exact option.

Permalink Reply by Larry Livengood on August 28, 2016 at 2:06am

My lease is very short and brief, two sides of a 8x14 paper (a 1990s boiler plate lease),   No  clauses allowing any deductions.  No addendums have ever been signed.  

Typical response from CHK has been, if you think this is wrong, sue us, but don't forget the arbitration clause.  After you waste money on a lawyer and filings, appeals, and counter suits,we will call for arbitration and we use only professional arbitrators and the presentation will take days, if not weeks. Remember, you are liable for an equal share of the costs of arbitration.   Financial blackmail. 

Permalink Reply by Larry Livengood on August 28, 2016 at 1:51am

Ah, the good old days.  16.52% in 2013, 65.4% in 2016.  Nothing suspicious here.

Permalink Reply by kay moore on July 16, 2013 at 4:06am

WE ARE GOING TO JUST STARTING TO GET CHECKS SOON..AND WAS TOLD BY CHK THE POOL WE ARE IN DID 370000 MCF IN APRIL (MONTH) BUT THE CALCULATOR ON THIS SITE WANTS THE FIGURE FOR A DAY IN MMCF...HOW DO YOU GET THE MONTH AMOUNT OF MCF INTO DAY FOR MMCF..THANKS FOR ANY HELP  TO ME DOES NOT LOOK LIKE MUCH BUT AM COURIOUS..

Permalink Reply by LW on July 16, 2013 at 4:15am

Cheasapeake withheld 15% this month which is interesting because it has been between 20-25%.  The gas price was higher, so maybe the deductions will be lower if gas prices were to continue to rise.  I have heard that the amount of the deduction is fixed and not a percentage.    I have not tried to calculate whether it is based on gas price or volume or a combination of both. 

The other 3 companies seem to be lower also, but I have not calculated yet.   They are always different, even within the same month.  The volume, the gas price, the deductions are different amounts for all 4 companies.  And sometimes one company is higher on deductions, even up to 30%, while the next month that company might be the lowest percentage.   I haven't charted it, but maybe will do so in the future.

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