I just started receiving royalty payments for a mineral lease in Wetzel County, West Virginia. I was paid $2.80 for the gas on my September royalty check. Wetzel County is supposed to be rich in NGLs. My lease is an old "flat rate" lease, written in 1900. Are gas companies supposed to compensate the mineral holder for NGLs?  $2.80 seems low?

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As Dexter pointed out, local differentials relative to Henry Hub can be very high.

Believe it or not the "1/8th, no cost" is very strong language.  That should get you no deductions but you will have to fight for it.  Here in Butler County, Forward Township, PA (wet Marcellus) I know of two land owners with that clause who are indeed getting no deductions.

Eastern Wetzel county WV is close to the wet/dry divide.  If you are in that area, EQT could be selling the gas "as is".  If you are in a high BTU area then you should be getting paid for the NGL's

Phil

Thank you Philip.  I have heard that the gas companies file  reports outlining the gas, oil and liquids removed from a well.  I will do some internet research and figure out how to get my hands on those reports. Then I will know if EQT has wet or dry gas coming out of our Big 192 and Big 333 well pads in Wetzel. There has been a small amount of oil.

I am hopeful of winning the deductions battle. I hope the court will award court costs.  If not, then that probably deters many mineral holders from protecting their rights.

Marcus,

Neither PA or Ohio require O&G companies to report NGLs.  In PA and Ohio only bulk gas flow out of the well and actual liquids (oil and condensate) are reported.  I don't know about WV.  If indeed EQT is cheating you, you would need an audit to catch them.  Many leases have an audit clause.  If yours does not then perhaps a neighbor who has a more modern lease with EQT that has an audit clause.  Best to band together to spread the costs of an audit.

Phil

Check your local Hub for local gas prices, papers print the Henry Hub, which doesn't reflect PA/WV prices.

http://www.naturalgasintel.com/ice

So much to learn!  And I was naive enough to think that EQT was going to be a good "partner" :  /

Marcus,

    I can save you some research time for WV NGL documentation requirements. Yes WV Dept Of Env Prot, Oil & Gas Div. requires NGLs to be reported. The page below is a good place to read about the requirements.

You might look on your lease or deed to see who your neighbors are and contact them to see if they are being paid for NGLs.

Ohio is going to lose Billions on the NGLs which I have informed the Governor, Atty Gnl, and Dir ODNR. They say the laws just don't apply to Oil and Gas Companys. Go figure $$$$$??.

In Ohio Producers report production of Oil, and Natural Gas with the ODNR. They code Oil, Natural Gas, and Natural Gas Liquids on Royalty Statements, but since no one is watching, they always figure out a way to take the NGLs with minimal payment or none at all.

File a complaint with the WV Attorney Generals Office. Each states AG is supposed to enforce the law, but some how oil and gas companies have a "Diplomatic Immunity" card in each state. Probably a money talks prepaid Stay Out Of Jail deal with each states Gov & AG.

I really need to get used to being stolen from, I'm causing too much negativity on GMS.com and the State folks are getting tired of hearing from me. Get an Attorney was the last piece of advice I got, just today. The State Folks happen to be Attorneys being paid by me, too bad I can't vote them out. Good Luck Marcus.  

  http://www.dep.wv.gov/oil-and-gas/rr/Pages/default.aspx

In a different county, a different company,  I was told they are taking deductions (just since Sept 2013 for wells drilled 1987) " is paying the 1/8 royalty pursuant to WV Code section 22-6-8" ... That Code section provides that the owner of the oil and gas is to be paid 1/8 of the amount paid or allocated to the working interest owner. Typically the working interest owner shares in all charges associated with both production of the gas and transportation of the gas to market.

Below is the code section:

WV code 22-6-8-4-e

(e) To avoid the permit prohibition of subsection (d), the applicant may file with such application an affidavit which certifies that the affiant is authorized by the owner of the working interest in the well to state that it shall tender to the owner of the oil or gas in place not less than one eighth of the total amount paid to or received by or allowed to the owner of the working interest at the wellhead for the oil or gas so extracted, produced or marketed before deducting the amount to be paid to or set aside for the owner of the oil or gas in place, on all such oil or gas to be extracted, produced or marketed from the well. If such affidavit be filed with such application, then such application for permit shall be treated as if such lease or leases or other continuing contract or contracts comply with the provisions of this section.

Probably EQT has similar reasoning.

Hi Marcus -

My family is in a very similar situation with EQT where we had an old lease in Marion County, east of Wetzel Co, they came to us as they wanted to drill Marcellus and we received an acreage bonus, but the old terms of the lease of 12.5% and deductions were "not negotiable" per EQT. Come to find out that they are negotiable but a lot that EQT, and the landman company they used said turned out to be not true, expensive lesson learned. 2 wells later we are being paid 1 to 2 dollars less than Henry Hub ($2.43 per MCF for Sept '14) and ZERO for no NGL's. Not that there would be a ton at this location, as it is further east, but nothing at all. At a local meeting of WV Oil and Gas mineral owners, someone else explained the same situation they were in with EQT. They called EQT and the EQT rep basically said they'd need to sue them if they wanted paid for NGL's. This person is working with an lawyer and said there was likely to be a class action lawsuit. I'll see if I can get you the information. For the past 2 years we've had nearly 150k of deductions, which when they explained them, said that they'd be about 100 bucks for every 1000 or ~10%. Well, we've not made anywhere near 1.5 million so I'd say that was also one of their many lies. The local markets hubsp in this area are Dominion North and South and they are low compared to Henry or other Hubs. So buyer beware when dealing with EQT and be sure to work with a lawyer when negotiating with these folks. We fortunately have other acreage in other counties and learned quite a few lessons we used when negotiating with other Operators.

Thank you all for your responses. We certainly must stick together.  Us royalty owners and our individual states are losing huge amounts of money to the oil & gas companies.

I have had time to research W.W. McDonald v. EQT. This pertains to deductions and EQT lost in West Virginia's Southern District Court, in 2013. From my reading of the case the court is saying that specific deduction language must be contained in a lease.  And this language must spell out exactly what deductions are being taken and how they will be accounted for.  If specific deduction language is not in a lease then EQT can not take deductions. 

My 1900 lease has no such language regarding deductions and goes a step further, stating "1/8th, No Costs".

Let's keep each other posted regarding a class action pertaining to NGLs.  We all could benefit.  

I have read a few articles which state that the Pennsylvania legislature and Attorney General's office are taking steps to stop oil & gas company rip-offs...going so far as to mention possible RICO actions.

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