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: 885

Reply to This

Replies to This Discussion

the companys will not accept individual leases with landowner friendly language. the real answer lies in state law clearly defining royalty minimum payments. the industry has purchased key committee chairman who block legislation here in Pa. the represenative is from a non gas producing part of the state. CHK had it all figured out and now others mimic their corporate culture. landowners could always stop leasing. lol.

after 100 years of natural resource extraction from timber, coal to o&g, the landowner continues to get the slippery end of the stick from ALL sides. in Pa. we have a liberal rep. from Philadelphia representing the teachers union who has stated that our private property resource is public in his view. the state should own the resources and divvy up the  proceeds as it sees fit. left wing extreme communist philosophy is alive and well. on the conservative side landowners get no redress concerning royalty clarification due to industry lobby efforts targeting industry shill politicians. we as landowners cut off our noses  to spite our faces when we avoid talking to neighbors and banding together for a group leasing strategy as there are no others out there to represent our interests better than ourselves. wake the hell up people as there are torch wielding bands out there wanting to take our gas in the form of severance taxes, royalty manipulations, OGM purchases or any way possible from all factions.landowners have few friends on our side.

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

why not have solid law set by our politicians to start with, then litigate if need be. don't forget the arbitration clause which handcuffs us for the beating to follow.

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.  

i don't see companies exepting this type of lease language broadly. unless a large acreage is offered the company holds advantage. leases will simply be rejected.

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.


Local Groups

Blog Posts

US Greenhouse Emissions Lowest Per Capita Since 1950, Thanks to Fracking

Posted by Thomas J Shepstone on November 14, 2018 at 11:44am 1 Comment

You won’t find “fracking” in this story but it’s why the US has been able to shift from coal to natural gas with much lower greenhouse gas emissions.

According to the Environmental Protection Agency (EPA), U.S.…


© 2018   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service