Hello all,

Recently have noticed some interest in the "market enhancement" clause some folks have.  My lease was written by my attys but part of it is a bit confusing to me.  Section b... not sure if that allows for any deductions or not.  The 1st line makes you instantly think no way but I'm not sure about the " point of sale ".  Where is that at?  From the wellhead or say after it passes through gathering lines etc to another site, compression station etc?  Seems to be cloudy vs the 1st line.  I will attempt to contact the attys who drafted this, it was part of the coexprise M and P lease/landowner group so many people have something similar.

My royalty clause reads as follows ( no exact market enhancement statement, but it is a bit confusing to me ). " Lessee shall pay to lessor free of cost, a royalty equal to 15% of the gross proceeds received by lessee for the sale of all oil, gas or related hydrocarbons produced and sold from the leased premises.  It is understood and agreed that to the extent Lessee sells oil, gas or related hydrocarbons to an affiliate, the price upon which royalty shall be based shall be the greater of: a) the price paid by the affilitate or b) the price that would have been received from a sale to an unaffiliated third party under a sales arrangement for like quantity, quality, term and at the same point of sale to the affilitate.:

Section B is confusing to me and attys drafted this not the gas company so hopefully the language is good and does not allow for the "market enhancement" etc.  It is with Chesapeake so I am wanting to look into it since they seem to be the only one making such deductions.

Thanks in advance for any insight as to this lease language.