Uderstanding your royalty statements, empowering landowners against royalty theft or mistakes

We are chugging along towards completion of the well that includes a portion of our property. The last word is completion of the connecting pipeline is in June and it looks like they are well moving to that goal. They have been working 24 hours a day setting up the pad for production and what I assume is the flowback portion of the procedure.

My attention will soon turn towards a very daunting task of verifying my royalty statements against lease terms and fair market pricing.

I have been told and very much believe that the statements will be nearly impossible to read and understand. Fair enough, but, I am not easily daunted by complications from difficult situations. I fully intend to hire an accounting firm specializing in oil and gas royalties to verify everything and then I will hold the producer accountable for any discrepancies.

I am tired of hearing about landowners being abused.

This is a serious matter, folks who have never had money think money solves problems but it doesn't, it creates a whole new set of complications. And so it is with your royalties.

This site could do a tremendous service to its participants if instead of bombarding us with buyers of mineral rights and royalties it would offer solutions to understanding your royalty statements and aiding in the educating of landowners.

This is my new endeavor, soon enough we will begin to receive royalties and I fully intend to stick around, sharing information with others, learning from some and helping others, extracting the falsehoods and emphasizing the truths.

So, does anyone have any useful information for us on how they started down the path of deciphering royalty statements ? My first guess is the statements are overloaded with numbers that don't correspond to other numbers, confusing and complicating matters needlessly.

I appreciate anyone trying to help.

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Replies to This Discussion

Permalink Reply by G.H. on March 24, 2016 at 9:46am

They have local events.  I have never been to one, but they had one in southern Ohio not too long ago, which was supposed to include a segment on deciphering royalty statements.

Permalink Reply by Dalmorloson on March 23, 2016 at 1:07pm

David, I am a landowner in Ohio. I sent you a friend request so that I can message you privately.

Permalink Reply by David Allen Lilly on March 23, 2016 at 11:51pm

I sent the request but I prefer to communicate in the open.

Permalink Reply by Becky on March 24, 2016 at 1:55am

I also sent you a private message. 

Permalink Reply by David Allen Lilly on March 24, 2016 at 12:03am

I am not sure an audit is the way to go, I am much more interested in protecting myself from theft using deductions the producer is not entitled to.

My lease is very specific about deductions, and how my royalty is to be figured.

I don't doubt that some companies will ignore those terms anyhow and see if they can get away with it. I have to believe that eventually one can get back what should have been his in the first place, as a matter of law.

We need a better vehicle for coordinating all legal efforts against royalty theft. A vehicle that is not overwhelmed by royalty buyers and such.

Permalink Reply by Lynn mudder on March 24, 2016 at 12:58am
Can I ask what company you are leased with?
Permalink Reply by David Allen Lilly on March 25, 2016 at 12:19am

I leased with Antero, they proved through my research to be the best, most reputable option we had.

Sadly they traded our lease to Eclipse who then traded 12.5 of our acres to Chesapeake.

Obviously we are not pleased but there is nothing we can do about it.

I did get a very strong lease though, I know it wont be real popular with the producers.

Permalink Reply by Fast on March 24, 2016 at 1:28am
For me the audit is key. If it is found out during audit...they underpaid us. They have to pay the cost of the audit, the underpaid royalty money & 10% percent interest.
Permalink Reply by David Allen Lilly on March 25, 2016 at 12:20am

we have the same clause. I think a class action suit is a great weapon too.

Permalink Reply by Fast on March 25, 2016 at 12:46am
My attorney stated a class action suit would most likely be coming in the near future. I didn't say much ... I just listened. I'm not a fan of class action suits. My perception is the lawyers get the lions share and you get the leftovers. If that was the only option ... I guess I would be "all in". However, INVICTUS said it best. You pay your attorney for backroom negotiations & at the end of the day.. They settle to keep it out of court. I think you get more of what's coming to you ... By going SOLO. Time will tell how all this will play out. Fact is too many people are getting cheated and the situation is very out in the open. With that said... Go Marcellus is a great tool to provide information to educate the landowners. I've never heard anyone complain they're educated too much.
0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on March 24, 2016 at 9:48am

David,

    If you want to become an expert on Chesapeake Energy royalty statements, their Revenue Department Spreadsheet of theft which each royalty owner has on file, and all the ways Chesapeake has found to reduce our royalties to nothing, then take a look at the Hope Fellowship Church vs Chesapeake Amended Complaint.   

You'll see examples of Buck Well 1H royalty statements, the Revenue Department spreadsheet used to produce the fraudulent amounts, and the lawyer did a good job explaining all of the theft in progress for oil and natural gas.

We have been charged a portion of the bogus calculated oil and gas royalty to have our NGLs stolen. We are paying for the Scio, Kensington and Natrium, WV processing plants with our royalties. Another Access Midstream theft similar to PA, in the form of processing plants instead of pipeline theft.

Everyone, please Friend Me so you can read all of my posts. The word is not getting out fast enough to stop the shale play governors who want to be in the White House. The Big House should be their homes for years to come when the Citizens of each state learn to use the laws against those who think they run the state. Elected officials are just that, not dictators that can do what they want.

Permalink Reply by JL on March 24, 2016 at 12:34pm

Are the recipients of royalties, that aren't being paid for NGL's, being paid for the BTU content of the gas?

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