Replies to This Discussion

Permalink Reply by Thomas Betlyn on March 17, 2014 at 10:05am

Take your political views to a politics board, this if for people how want drilling.

Permalink Reply by PHILIP ANGELO on March 17, 2014 at 10:25am

I'm for drilling. I'm a land owner how is being cheated by the  the gas company you will see they need to pay the land owners for our gas and oil it's not for free!!!

Permalink Reply by Thomas Betlyn on March 17, 2014 at 10:56am

How are you being cheated?  You aren't happy with your lease, the one you signed?  Seven years ago our family signed a lease with Great Lakes, for $1000.00 an acre at 11%.  That's terrible, but we did sign it.  Luckily it came for a renewal and we got $2750 an acre (Still alow amount) with 18% royalty.  We signed it. This isn't the NFL where we are players and sit out because we are unhappy about the "SIGNED" contract.  I agree some people are signed for a long time at a bad rate, but in reality, no one put a gun to their head and said sign.  Why is it the governments responsibilty to get involed with private companies and landowners?  They already tax us to death,regulate us to death and infring on our constitutional rights, now they're supposed to renegotiate contracts between two private entities? 

Permalink Reply by MAGA on March 17, 2014 at 12:52pm

Well said Thomas. If PA landowners continue to view the Oil and Gas companies as predatory/hostile entities and challenge them on every issue, then wait and see what happens.    

Permalink Reply by PHILIP ANGELO on March 17, 2014 at 3:23pm

 Thomas first of all I didn't sign the less it was given to me when I purchased the property 7 years age. And did you ever here of the minimum royalty act 1979 to protect land owners? They will screw you and anyone they can. Open your eye you fool. There is no one for free market capitalism more then me, but the oil and gas co use our politicians to get their agenda passed.

Permalink Reply by Thomas Betlyn on March 17, 2014 at 11:10pm

Section 1.3.  Royalty guaranteed.

A lease or other such agreement conveying the right to remove or recover oil, natural gas or gas of any other designation from the lessor to the lessee shall not be valid if the lease does not guarantee the lessor at least one-eighth royalty of all oil, natural gas or gas of other designations removed or recovered from the subject real property.

Section 3.4.  Conflicts.

If there is any conflict between a division order and an oil and gas lease, the terms and conditions of the oil and gas lease shall control. A division order may not amend or supplement the terms and conditions of an oil and gas lease.

These are the two main points of the act.  What ones are you against?

Now, a lease cannot just be given to you. You have to acquire it through property transfer with the mineral rights for that property.  I'm thinking that's what you're saying. Have they started drilling on your or other properties as part of your lease?  If not, when does your lease renew?  Bottom line, you inherited, had transferred or was given the property with this lease.  The transactions were done prior to your ownership.  That is the real issue, until it renews as your property it is, as they say what it is.  Educate us, what was the lease for (Dollar per acre, % of royalty)

Permalink Reply by PHILIP ANGELO on March 18, 2014 at 12:20am

"guarantee the lessor at least one-eighth royalty of all oil, natural gas or gas of other designations removed or recovered from the" yes exactly what part don't they understand. the oil and gas companies find loopoles to get around this law in the way of gathering and transportation cost passed on to the landowner. my lease is 12.5% and I'm receiving some where around

4% to 6 %  depending on what they decide to give me. and they will do the same to you!!

Permalink Reply by Thomas Betlyn on March 18, 2014 at 12:42am

You do realize, and please I'm not patronizing you, that like you, I have a royalty figure, but that figure is based on 18% of 30 acres of 600 or 1200 acres.  Also, that figure is based upon the amount of gas they get at any time.  They can lower or raise the production level, thus lowering or raising the amount.  I'd look at that production level, it may well be 12% but the amount at the well head maybe so small it looks like 4 to 6.  Just guessing here.  Remember, 1/8th royaly should not be confused with 8% royalty, two different numbers.

 

Permalink Reply by joe on March 18, 2014 at 12:56am

I am in a similar boat as Philip. Leased with CHK, for 12.5% at the wellhead. Property was leased before I bought it, so I have to live with what the lease as is, and I'm fine with that. I assumed that at the wellhead meant no deductions, but they are taking out deductions for gathering and transporting the gas; said they are allowed to.

Check for December produced 47910.80 mcf at $3.774. I have 10.624 acres in the unit, which is 850.728 acres total. So 10.624/850.728*12.5%=0.156% of the total unit.

47910.80*$3.774*0.156%=$282.07, which should be the guaranteed minimum (12.5%) that I recieve. But then they take out $51.22 for Gathering and $6.08 for Transporting, leaving me with $224.77. If you do the math, that ends up being less than 10%. That is what CHK is doing all over that state. And if your lease allows deductions, it is even worse. I have heard of people getting 1-2%.

Permalink Reply by Thomas Betlyn on March 18, 2014 at 1:08am

On this topic, what are you taxed on, the actual 12.5% or the after fees amount?  I ask because that's where the state get their money.  The state, regardless of what royalties are or are not actually paid, if on gross receipts they win no matter what.

Permalink Reply by Thomas Betlyn on March 18, 2014 at 2:44am

After reading this, I have to ask, is the fee a flat fee? For someone with small acreage those fees would dig into the percentage they'd get.  If a person has a 100, 200 or 300 acre lease and those fees are the same, then the amont has little effect on their royalties.  One thing, I think people had some wild thoughts about making a lot of money on very small parcells.  The 30 acres I own had a lease with Great Lakes (Now Range Resources)  The original lease expired and I contacted Range, they said 30 acres wasn't worth thier effort, plus they aren't in the area of Beaver County I line in.  Shell on the other hand was out the next day as I am surrounded by 800 acres,more or less of one property owner called CEMEX.  I'm a part of the corner of the pie they needed.I was given some pie in the sky numbers, but I do not have plans on monies based on those "INFLATED" figures. 

Permalink Reply by Thomas Betlyn on March 18, 2014 at 3:14am

Philip, thanks for educating me on this topic.  The bill DID pass committee, thus I think that insures it will pass the house and senate and be signed.  As for the representatives, I agree, which ever district they represent it should be in our (And PA's) best interest to not re-elect them.   I also retract my original comment, as I was uneducated in this matter and now feel very much informed.

 

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