Royalties...finally

Finally started getting our royalty checks from Chesapeake and Stat Oil. I was a member here before but nothing was happening with our property and all everyone was offering was conjecture and hearsay. The checks we have gotten from our well in Bradford county are really not that good. We must have gotten an average production well. We have 15 acres in two units and the on that is producing is about 9 acres and the total checks between the two oil companies total about $1500 dollars for three months of production. The gas prices they sold the gas out was well below the well head price that you see on tv or on Marcellus shale forum. The gas was sold for over $1.50 less than you see everywhere and the amount chespaeake takes out for production is between 34-38 per cent which is ridiculous. Hopefully, the price of gas will rise in the future to give us a little more in royalties. Just wanted to post this because when I was a member before was kind of upset that no one would say what they were getting and told myself when i received royalties I would share the info. Really thought we would be in for a windfall but I guess it all depends on the output of the well and the thing is we only have one well drilled on the pad and it doesn't look like more wells will be drilled in the near future. Just have to hope the other unit I am a part of will produce better. If any one has any questions feel free to ask. Thanks

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Permalink Reply by Barbara on December 4, 2012 at 11:53am

nice, james.....mine INCLUDES all of that BEFORE royalties are calculated.  who are you with???

Permalink Reply by James T Monyak on December 27, 2012 at 10:24am

Consol Energy

Permalink Reply by Carol on December 7, 2012 at 8:50am

This wording: "however, any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted"  is not so awesome.  The gas company can take deductions for so many types of things.  Believe me, it's happening in my area now.  Did you know that transporting it through interstate pipelines to other states is "enhancing the value?"   

Permalink Reply by James T Monyak on December 8, 2012 at 4:53am

Carol,

What is the percentage of deductions are they taking from your check.

I have two Marcellus wells.  One with Consol Energy "Greene County" and the other with CHK "Bradford County".  I have not received my first check from either one of them yet.  Consol pays 60 days after the production month and CHIK pays 90 days after the production month. 

Permalink Reply by daniel cohen on December 27, 2012 at 2:00pm

This is a semantic difference rather than a difference in fact. If the value of the product itself is improved, then yes, we as landowners ought to share in that expense. By transporting to anywhere in search of better prices-that's marketing-not enhancement. To be charged for the gathering and transporting of unchanged gas-that's a dodge that the companies are trying to get away with. Just a personal opinion at this point, but I'm close to moving to legal representation to challenge the notion.

Dan

Permalink Reply by daniel cohen on December 4, 2012 at 8:30am

Royalties are paid on the basis of the production reported. Does anyone have any idea about who might be checking to be certain that the reported production figures issued by the companies are accurate?

Dan

Permalink Reply by JK on December 4, 2012 at 9:26am

Dan, you've got to be kidding!

The only way to be sure of production is to actually check the wells every day.

The production is posted in March/April? of the next year in the records of the USGS for the current year.

We can only hope the records are true.

Yeah right..

Permalink Reply by James T Monyak on December 4, 2012 at 9:39am

Keep in mind that if your E&P company is public they are subject to audits from their CPA firm. Nevertheless, errors and a different interpretation of lease wording can happen and you should review the details that make up your royalty payments. 

Permalink Reply by JK on December 4, 2012 at 10:04am

James,

It seems like the only auditing going on is when there's a class action happening requiring an audit.

Permalink Reply by JK on December 4, 2012 at 10:15am

Josie,

Your story you wrote was good. Thank you.

I don't know if we have a provision for annual auditing.

I do know we were in 2 class action suits with CHK.

Permalink Reply by Barbara on December 4, 2012 at 12:03pm

anybody else feel extremely impotent in all of the process....from the beginning approach by the seismic testing people thru landman and through now?????  we, our lawyers and any other advisers are so far behind the eightball...the hundreds ??  of lawyers working FOR the companies creating all the legal mumbo jumbo have us running blind.

Permalink Reply by jonathan M. on December 4, 2012 at 12:23pm
Josie,

I second that! When we went to lease our minerals in 2011 we went through several so called "oil and gas" attorneys. It sees that with the research I did myself on Internet I knew more about the leases than many of them. Now they all claim to be experts. Give me a break!!

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