I just found out that Energy Corporation of America has been withholding costs from our lease, an old one with no deductions allowed (at least none listed as allowed). Called "Owner trans". Been happening several months. I was wondering what it could mean, and wrote them twice with no results. I called and was told that since the Pennsylvania Supreme Court ruling allowed deductions in Pennsylvania, they decided to make these deductions in other states "to make it uniform". I asked for it in writing, and she said she would try to get Legal Dept. to send me something. Anybody else have this situation? Scary. I have been reading about Pennsylvania and feeling sorry for them but it is time to try to fight it in WV.
Nancy, my well numbers are 00069900 which shows no trans costs coming out. The other one is J0228000 in which they took out 44% in my little May check.
I would love to be your friend, but I don't know how to do that. I am new to writing on here. So could you befriend me?
Hi Jackie, I just sent the friend request with the info about your J well. The other one is not on the list so not part of the Spotloe.
Do you have a copy of the lease on that one? If it is not a flat rate, and not part of the settlement, maybe you are lucky and they can't think of a way to take out the owner trans!.
If you look at your check stub information, when they take the owner trans, they should list a gross royalty and a net royalty which is gross royalty less the trans charge. When paying taxes, you can take the 15% depletion on the gross royalty. Probably your 1099 only shows the net royalty amount for that J well. If so, you can ask for a revised 1099 reflecting the gross and the net for that well, so when you file your taxes the IRS will know how you got your depletion amount. I made my request but have not received a new one yet.
Hi Nancy and thank you so much. This if very enlightening! You have been so helpful in helping me to understand. That is great tax info too.
What % do they take from your checks? They started out taking 20% from me for the owner trans. My last check they took 44%.
Can't thank you enough for all your help.
I think when I first noticed, it was around 12%. It was around 40% last time. My guess is, that the transportation costs are about the same every month, and the price of gas varies. When gas price is high, the transportation costs are in a lower proportion to the royalty, so the % is lower. Opposite when the price of natural gas is low, like now. Maybe somebody can say for sure. You can see how they want you to help them pay for the transport, and if our royalty were 20% or 25% I can see how that might be fair. But at a 12.5% royalty, take away 44% of that and you don't have a lot left. With these old wells, there wasn't that much to begin with anymore.
And, you're welcome. I am glad to share what I have learned. Maybe we can all learn more together. .
Nancy, I called and talked with David Blashford in ECA tax department. He immediately emailed me a summary data showing my net and gross. So give him a call ext. 1323.
My revised form came in yesterday's mail. I hope they think of sending this to everybody involved, but at least you and I are all set!