from News One:
By JEFF STONE | email@example.com
Just started getting Royalties from SWN 7 months ago. We are averaging from 2% to 6% and they are keeping the rest in deductions! We are just disgusted. How long before we start getting bills.
There is a need to organize at the State level.
Everyone is being stolen from....The State, the County, the townships, the school districts, the landowners, the local businesses.
Hoping that House Bill 1684 gets passed by the House this fall. It has been years since it was first introduced. If it gets through the House it goes to the Senate. I just have no faith in our government at any level. They seem to be for big corporations, not their constituents.
I have said the same things that you mentioned to my state reps regarding the loss of tax dollars to the state because so many people are getting screwed out their royalties. The state is always crying poor mouth yet they are letting all this money slip out of their fingers. It's insane.
Give me my money and I have no problem paying taxes on it.
The royalty clause may not address deductions explicitly. It may say something like "1/8 of the net proceeds for gas sold at the wellhead". This language says much more than the few words might indicate to someone not familiar with oil and gas law. The point of sale is important. Gas sold at the well will receive a lower value than gas sold down the line or at the processing plant. Gas sold at the well head will also receive a lower price if it needs to be dehyrated, compressed, treated or processed in any other manner. There are so many different royalty clauses in use in eastern Ohio, that this discussion is of little value without comparing the exact language. Some leases say net proceeds, some say market value, some say gross proceeds. Some have specific language addressing deductions for gathering, compression, dehydrating, treating or processing. Others do not.
For those complaining, I would suggest getting in touch with your state representatives. Complaining on this forum doesn't do much. There should be enough representatives from eastern Ohio in the legislature to get a statute addressing these issues. The statute should address deductions allowed, or not allowed, in the absence of specific lease language.
The transcript below is a typical example of people with little knowledge of oil and gas law opining on the issue. If landowners are to get 1/8 of the "value" of the gas, where is that value measured? If at the wellhead, the mineral owner will be responsible for getting it to the point of sale by the operator to the gas purchaser. If the gas purchaser requires it to be dehydrated compressed, the "value at the wellhead" will be reduced to reflect those costs. This is why it is so hard to create a statute providing how mineral owner royalties are paid. One of the best statutes from the landowners' view is found in Wyoming.
Looks like people are finally realizing NG co's are not the friendly neighbors they claimed to be .Screwing people out of their royalties has become the norm.Next time maybe we all won't jump the gun on leasing before we know the game !