If your lease is 12.5 % royalty on any oil and or gas and states to be paid at No cost, then what would any costs be that an OG company would feel is legit?

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Do you mean no deductions? If you do it could depend on what the rest of your lease says.  If there is a market enhancement clause all bets are off. It also depends on the O&G company. Many people who have a NO Deductions lease still get deductions taken out by some companies and some are fighting it. If it is a true no deduction lease and you have an honest company you will still get taxes taken out and the amount and type depends in which state the well is located. And even some counties and townships have taxes on production.

Dott, it’s an old lease my great great grandfather signed that states 1/8 part Of all oil and gas to be produced and saved from said premises, to be delivered in the pipeline to the credit of first party, free of charges. Which I take as at no cost for anything plain and simple.
There is no market enhancement clause or any other mention of deductions !!! Simple lease simple terms from a simple time.

I am not sure but does it mean that 1/8 of the oil and gas is to go to the  party free of charge that owns the oil and gas rights? The oil company gives it to them free of charge. That is what is sounds like but I am not an expert and probably no help. Maybe others will way in.  Maybe you need a lawyer.  What is the issue? Is the oil and gas company not giving you free fuel?

No issue as of yet, just preparing or attempting to prepare for future issues, well is being drilled now and trying to look at the issues pertaining to an old basic lease.


It would seem the language, although simple, would preclude the producer from taking deductions for anything (except taxes), but today's environment is a minefield in regards to deductions, authorized or not.

The question that comes to mind is this-who is the producer? Once that is known, you may be able to find evidence on this forum about their deduction(s) policy.

Best of luck to you.

If they (EQT) the producer, is going by today’s environment/minefield as opposed to the environment when the lease was signed, then wouldn’t that be an obligation to renegotiate to today’s? As far as I know a lease is a written binding contract and anything other than what’s in that contract is reason to terminate it. I’d say it will be a waiting game to see how this all plays out, including the free gas that’s also in the lease.
You won’t receive free gas from any new deep well drilled by EQT maybe a once a year payment 1200 or something like that. And if it’s an old lederhosen EQT lease at 12.5% royalty you maybe surprised when the check comes with the deductions column
Talk to a lawyer. Some charges that are considered legit---gathering, separating, processing, transporting, delivery, sale, use on site, pro rata contract fees for those services both variable and fixed, disposal, customary line loss, etc. In WV many supposed to be on check stub now, but if a "market enhancement" then negotiate.
In consideration of one dollar is the only way consider was used in my lease so I’m not sure who is the one being considered when you bring all that extra wording up? And if it’s to be considered/ added then so should many facts and theories of it, if it’s not in the binding, legal contract that both parties agreed too (not matter when it was negotiated) then a re-nogotiation should be done, if you sign, buy or agree to take on a contract then by law it’s binding to you unless renegotiated!!!! My great great grandfather is not here to change, consider, alter or add anything to what he felt was a fair contract for his heirs at the signing but I’d venture to say that he would probably have second thoughts on it in today’s world just as the Gas and oil companies have. They send car salesmen out to get the best deals they can thru wording and legal Mumbo jumbo that most do not understand other than the nightmares/results they are to receive. My grandfather wasn’t a highly educated man as a matter of fact he signed his name with an X and a witness as his education was learned thru hard work and a handshake, fortunately he knew they wanted what he had and worked his whole life for and signed a legal contract nothing added or considered other than the four corners of the contract, if it’s not in writing as a contract then only the uniformed are at the hands of the lessor. When you say some charges are considered, I as a lessor have a problem with that as most should, if they the lessee have a problem with a contract/lease then it’s up to them to renegotiate so both parties are as you say considered. The lessee comes to the lessor from the start. In layman’s terms They want what you have, Then just as they do now. If it’s not written in the four corners of a written contract then it’s not part of a contract. It only makes sense even to this layman. And somehow we are required to pay big $ to have it explained? If your 10 page lease is hard to understand and you want to consider everything then I’d advise you pay big $ money to understand it or as my grand father did make it simple. 1/8 at no cost, he didn’t care how they transported,separated,gathered or what ever they wanted to do with it that’s their choice after the signing. Remember they came to him!!!!
If your great great grandfather signed a flat rate lease, that lawsuit is taking place now. The stuff I mentioned was just intended to show that unless you tell a company they can't take X, Y, and Z out of your royalty payment, then the company might. For a purely historical perspective, I recommend reading a bio on Godfrey Cabot. Also, just because you didn't initiate contact doesn't mean you aren't playing. If playing, why not learn the mumbo jumbo? I prefer that people are aware as opposed to not. Just me.
The X,Y and Z were dealt with in two words, ( No Cost). The history of Cabot is summed up in one paragraph I found on him (history is not so kind to the multi-millionaire, his humble demeanor is suspect in taking advantage of local farmers at a time when a few dollars meant a lot.) Just Me being aware.


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