1. Ok so since the shale boom there have been so many lawsuits around oil and gas companies skimming off the gross royalty and charging deductions.  How many land owner attorneys even gave their blessing to Chesapeake's market enhancement clause.  Good grief!  But there have been numerous bad royalty payers of which it seems they force the hand of royalty owners to sue for the royalty due, but then later settle in n court.  Still, a win win for the industry and it seems some companies have made the strategy part if their business model.  There are many royalty owner friendlyclauses because of past industry abuse but I have not seen one regarding royalty manipulation.  Perhaps a new lease clause should be saught by royalty owners specifying punitive damage fees for unauthorized deductions determined by a court of law or arbitration.  Perhaps the clause should read to include full back payment plus 25% punitive damages.  I think it's necessary and I'm sure a competent attorney who did not give their blessing to market enhancement clauses could dress up a Royalty Manipulation Clause to have the necessary teeth and legal language to make royalty and deduction manipulators think twice.

Views: 1357

Reply to This

Replies to This Discussion

Why limit the damage to 25%? Allow a jury to set punitive damages, which can be greater than 25%.

Ageed, but in the mean time......a clause like this could easily stipulate the arbitrator or courtmay determine if the operator was manipulating royalty that the punitive damages plus back pay be made.  

That would be good for groups to demand and when it starts gaining popularity it could be standard for good companies to start listing as standard addendum language.  Like all good clauses there was starting point inception.

Mine says if I have to take them to court and win they are responsible for attorney fews and 125% of the award


I have never seen that clause before, but tip my hat to you for being able to negotiate it.

Congrats, Well Done

Outstanding Pete, maybe more royalty owners will take heed in how to stop royalty manipulation.

Wv mineral owner do you have an idea on what mineral rights would be worth in Brooke county wv already into second term leased ?


I am not as familiar with Brooke County as I am other areas, but have a general idea.  There are factors in Brooke County that are not as significant in the areas I have minerals, primarily who the lease is with.  My understanding is that EQT, StatOil and what was once Chesapeake are the larger producers.  Equally, if there is a current shallow well producing on the tract and what royalty % is involved.

That said, I imagine $4,000.00 / Net Mineral Acre is a ballpark figure.  If you wish to share more details in a private email on this site, I will try to give you a better estimate as to a fair market value.


Nothing good about the obfuscational contractual double speak grief the E & P Companies bring to the land / mineral owners. Those that do ought to be run out of the business. JMHO.


© 2022   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service