David Allen Lilly

David,

I have accepted your friend invite and would appreciate any info you are willing to share.  I have property off of Barker Rd in the southeast corner of Millwood township.

Thanks,

Dave Cain

David,

Maybe I found a way.  Is this email getting to you after all?

Thanks for the information David. I am with Chevron and my O & G rights are in Mill township, Tuscarawas County Ohio. I am in the Wet Gas area and the company is mostly after the condensates I am told although there will be some Oil and Gas coming out with it I imagine. Are you being paid for condensates?

And the second question I have is does your "Market Enhancement" Clause read exactly like mine?

Here is my Clause:

Such royalty to be calculated without deduction for the production, gathering, storing, separating, treatment, dehydrating, compressing, processing, transportation and marketing of Oil and gas and other products, provided however any such costs which result in enhancing the value of marketable oil and gas or other products to receive a better price that is less than or more than the price received by Lessee.

I ask this because you said the O& G company is not deducting anything. Chevron wants to ratify the lease to increase the unit size from 640 acres to 1450 acres (Longer laterals to be drilled in 2018). So I said that I would agree to the increase if they drop the Market Enhancement Clause.  They said they would but only if I agreed to having all "Transportation" charges deducted.  So I don't know if I should just keep the Market Enhancement clause and take my chances or go with the Transportation Charges. 

Some Lawyers have told me that Market Enhancement Clauses allow them a backdoor to charge any type of deduction including transportation and thought perhaps just changing it to " Transportation" only would be better.  But you said with your Market Enhancement clause they don't deduct anything but I think your wording is a bit different than mine.  I would appreciate any insight.