How much are deductions draining your royalty check?

We seem to hear alot about Chesapeke siphoning off alot of deductions from royalty checks. How are the other gascos treating their landowners? Shell , Range , Hilcorp , Chevron , etc. , etc.?

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Permalink Reply by lettijack on November 4, 2013 at 5:41am

James,

  What did you end up learning about the deductions CONSOL assessed against your royalty?

Permalink Reply by David Allen Lilly on August 28, 2016 at 2:05am

I like your direction, the question for me is how we take into consideration volume+price-deductions (if applicable) to come up with a royalty amount that is truly comparable.

Even then we would need to consider that there are other variables involved but nonetheless it is most necessary to first devise some accurate method of computing an amount more comparable.

Soon enough we will be receiving royalties, maybe next month and I am in the process of interviewing for legal representation to assist us in dealing with our producer, Chesapeake Energy.

As well I worry about the folks who are here misrepresenting themselves and purposely sharing inaccurate information.

Permalink Reply by Larry Livengood on July 20, 2013 at 5:59am

Chesapeake offered to reach out with their Owner Relations Team to discuss my concerns about gathering fees.  This was my reply.

 Every time Chesapeake "reaches out to me", their hands end up in my pockets. After having 16.5% gathering fees deducted from my 12.5% royalties ( and I understand I'm getting off easy) because I was supposed to help with Chesapeake's expenses, I thought I'd check on this. I asked the management at WalMart, Sears, J.C. Penney, Abry's, McDonalds, Giant Eagle if they had a company policy to deduct money from the wages of their employees to help pay the electric bills, water, taxes, garbage pickup? To a person they thought that it was an absurd question and asked if I was serious and besides, who would put up with such an arrangement. They said if they tried that, their employees would quit in mass. No they wouldn't I replied if you were smart enough to talk them into signing an employment contract they can't break, get relief from, or have no input into changes made to the document (my lease 2002, Kilmer v. Elexco Land Services Inc 2010), and once signed, only your company can terminate the contract or let it lapse if they have no use for it. If there was some ambiguous term like royalty, the state legislature would allow you to make up your own definition. The employee remains powerless as your company would continue to maneuver and manipulate the contract through the courts until the employees are almost working for free, and receiving minimum benefit from the agreement. They thought I was crazy for suggesting such a thing and politely ushered me on my way. I thought to myself, Boy, you guys are working in the wrong field.

Permalink Reply by daniel cohen on July 20, 2013 at 1:46pm

Larry,

The only recourse to the landowner locked into the contract you described would be for the legislature and/or the Attorney General to hand down rulings, enforceable by law. There are several attorney's trying to have that happen. We wish them well for all of us.

Dan

Permalink Reply by Larry Livengood on July 20, 2013 at 3:28pm

I have talked with both local reps (Senate & House) and they are looking into a bill proposed from Bradford County concerning the deductions.  Legislation is our hope because the deadly arbitration clause keeps a lot of problems out of court, and in the courts their lawyers are winning these suits to diminish lessors rights.  Everyone needs to become active in the issue instead of complaining to their friends, but not doing anything. Become informed and proactive.

Permalink Reply by Rick on July 21, 2013 at 3:43am

Larry, I believe this fine young man Garth Everette is involved in this legislation you are talking about... he is a snake, and i believe in the back pocket of the O&G companies... please dont trust this man, and if you get a chance... please punish him for hurting the landowners all across the state by voting his sorry lying butt out!

LQQK at this: http://triblive.com/business/headlines/4303895-74/bill-pooling-prov...

Permalink Reply by Larry Livengood on July 21, 2013 at 1:55pm

Rep. Matt Baker and the three other drafters of the bill, Tina Pickett (R-Bradford/Sullivan/Susquehanna), Sandra Major (R-Susquehanna/Wayne/Wyoming), and Garth Everett (R-Lycoming), say the proposed legislation is intended to directly respond to concerns by landowners who have drilling leases and whose royalty payments have decreased due to post-production costs, according to a press release issued over the weekend by the four state representatives.

Permalink Reply by LW on July 21, 2013 at 2:28pm

Unbelievable! 

Permalink Reply by Rick on July 21, 2013 at 4:38pm

Dont trust Everett... he will just say he doesnt remember how the wording that is screwing you got put into the bill.. he is no friend to the landowner/mineral owner or his constituents... I wish he would stay the hell out of it! I'll bet he is involving himself in this legislation just to keep an eye on the details and report back to his backers... he will insert pro company wording into this bill also, and blame it on someone else, like he did on SB259.. snake...

Permalink Reply by st. croix on August 31, 2016 at 12:55pm
It's to bad that we don't have those types of politicians here in Ohio! If I was you I would call each one of them and thank them for trying to help you folks out
Permalink Reply by daniel cohen on July 22, 2013 at 8:20am

I currently receive 4 separate checks from 4 different companies on 2 wells that touch my land. The % deducted from the 2 companies that are doing that vary from month to month. If having those % figures would be of any help please let me know. The figurations are most mysterious and don't appear to be based upon logic or consistency. The rationale for the deductions are denied by two of the companies, and insisted upon by the other two. Clearly there is a legal department disagreement and all are reading the same lease! That our legislators & our Attorney General can't/won't become involved on a fraud charge basis is a wonderment. This is to be remembered when voting time comes around.

Dan

Permalink Reply by Larry Livengood on July 22, 2013 at 9:28am

Yes, any figures help.  I'm trying to figure out how they are arriving at their numbers.  Company names if you don't mind.  I'm only dealing with Chesapeake at the moment.

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