ROYALTIES

IF I OWN THE LAND AND MINERAL RIGHTS WHERE THEY PUT THE PAD DO I GET ROYALTIES FROM EACH ADDITIONAL WELL DRILLED?

 

 

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Permalink Reply by Carol on February 8, 2012 at 6:09am

Guess it depends on how many acres you own and the number of wells.  If one owns 100 acres or more and is in a unit with multiple wells, they very well may become shale-ionnaires fairly quick.   I have some neighbor shale-ionnaires - and that's just from their bonus money.  Three brothers I know with three separate farms have signed for over $900,000 each in bonus money.  None of them work their day jobs anymore.  In fact, most of the people in my area have quit their day jobs but if you talk to them they say they are not making much money in royalties. 

I'm still expecting well over $100k this year in royalties so I'm not complaining.  And, I don't own anywhere near 100 acres.  In fact, with the expected royalties I'm going to be paying an amount in taxes equal to what I earn at my full time job if I continue working.  I'm not sure it's worth working 40+ hours per week any more. 

Permalink Reply by Terry W. on February 8, 2012 at 6:42am

Carol:

Thank your for all the info that you are releasing to us.  It is definitely much

appreciated.

Hope others will do the same.

There are so many variables, but your info gives us a heads up on what

is coming..

Thanks

Permalink Reply by Carol on February 8, 2012 at 6:53am

I don't know why everyone is so secretive about their royalties.  Most of the information needed to calculate someone's approximate royalties is available on-line.  Some of the older leases were even recorded in entirety so everyone has access to some royalty percentages. 

I'm looking forward to the DEP production reports to be updated on their website so I know if I start getting paid on 5 more wells this month or next.  I don't know if they went into actual production on December 15th or January 1st. 

Permalink Reply by gary smith on February 8, 2012 at 11:19am

heres's some here-say. friend of mine working in warren pa. came across an old guy and his wife from east liverpool. he told my friend he has a hundred acres there. somebody drilled a well and his royalties were 661000 first month. next two months were higher. moved to the big woods. just heresay. good source though.

Permalink Reply by craig on February 8, 2012 at 11:48am

That would mean he received $6,100/acre, which is unrealistic.  I would be inclined to say that the well itself had total royalties of that amount. I just looked at a royalty receipt that had total royalties of 482,000+ and 520,000+ for one month on one lateral.

Of course he could also be talking about his signing bonus instead.

Just my thoughts.

Permalink Reply by gary smith on February 8, 2012 at 11:20am

carol, i'm up for adoption. hahaha

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 8, 2012 at 3:43pm

Billy...

on that link you provided

http://thedailyreview.com/news/chesapeake-energy-describes-adjustme...

(and thank you for doing so) regarding Chesapeake reducing royalties...

Chesapeake wrote, "These are costs incurred beyond the wellhead after the gas is ready for sale or use. Opinions varied on this issue as it had never been decided in Pennsylvania

do you know if these  costs they are speaking of are considered 'enhancement costs"

I have a 'gross' royalty contract where no post production costs should be deducted but there is what is called a 'market enhancement clause' which sorta contradicts the gross royalty clause by stating that 'enhancement costs' shall be deducted out of Lessor's share of royalty (which I wonder if they mean the entire enhancement cost?).

 

What I am also trying to understand with this discussion and with that link above...With Pa. and other states requiring that the landowner (lessor) receive a MIN. amount of 1/8 royalty (12.5percent) how is it that with post production costs they can give a check lower than the minimum to those with a 12.5% royalty at NET?  that would lower the state required min. royalty amount.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 8, 2012 at 5:47pm

hey...I want to thank the people that showed up on this discussion and shared royalty info with us...we really need that kind of input here at gomarcellusshale to help make decisions and have more knowledge/wisdom to work thru all of this.

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