Replies to This Discussion

Permalink Reply by Nancy Mosley on June 25, 2020 at 1:07pm

Which county and state? They are very reputable but always a good idea to involve an attorney in leases.

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Permalink Reply by Debra Bretz on June 26, 2020 at 4:57am

Tyler County. W.Va.

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Permalink Reply by Arnold L Stuart on June 26, 2020 at 5:05am

Nancy, How are you, and are you keeping busy? Lots going on in Tyler.

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Permalink Reply by Nancy Mosley on June 26, 2020 at 5:38am

Yes but not a lot in Ritchie! anyway I keep my eyes open. And the Tyler is mostly in Ellsworth, as I can remember.

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Permalink Reply by G.H. on June 29, 2020 at 6:44am

Their deductions on my lease are egregious compared to other royalties I receive.  Make sure your lease is ABSOLUTELY bulletproof and they cannot deduct for anything.

I just looked it up for you, their deductions from my royalties this year, year to date, are 50%!  Watch out for these crooks!  They will bend you over every chance they get!

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Permalink Reply by Joe C. on June 30, 2020 at 1:04am

Debra, Please make sure you have an attorney look over the lease or someone who can help you deal with the landman. 

My family was dealing with Antero in Wetzel, and had a lot of modifications done to the lease. 

Get out of that lease the General warranty clause, and the post production on the royalty.

We had all this added. 

Special warranty

Pugh Clause 

Marcellus depth only.

Cost free

18.5% on royalty

$5000 per ac bonus

Hold harmless clause

A better "Shut In" amount.

Hope this helps!

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Permalink Reply by Frank J Moll on June 30, 2020 at 2:47am

I have one lease with market enhancement clause that I signed before I knew what was going on, with the prices being low I get nothing in royalties due to all the deductions. I have another lease with the clause below with the same company and I have 0 deductions which is very nice

COST FREE ROYALTY: Lessee agrees to pay Lessor’s royalty based upon 18% of the gross proceeds received by Lessee (or its affiliate) in a sale of oil, gas or other hydrocarbons produced and sold hereunder to the first non-affiliated third-party purchaser at the point of sale to said non-affiliated third-party purchaser. 
To the extent there are post-production costs incurred between the well and the point of sale to the first non-affiliated third-party purchaser that are subtracted, netted, or deducted, directly or indirectly, from the gross proceeds paid to Lessee (or its affiliate), then such costs will be added back for purposes of calculating Lessor’s royalty.

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Permalink Reply by L. Gilmore on June 30, 2020 at 5:04am

GH, What kind of deductions do they take? We have 40 acres leased with Antero in Tyler county, Ellsworth district since 2012. No royalties yet. Pipelines under our property. (water, etc.)

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Permalink Reply by G.H. on July 2, 2020 at 8:42am

TRN3 - Transportation

Com1- Compression

FUL4U - Fuel

GTH3 - Gathering

TRN - Transportation (again?)

CMR1 - Compression (again?)

OH_SEV2 - Severance tax

PRC2 - Processing

Those are all the things they are taking deductions for, according to my royalty statements.  There are other codes that are listed in the key for deduction codes that they are not taking (yet).  

The kicker is these crooks have their own midstream company, so I suspect that they are taking even more of my money by either selling to their own midstream company at a reduced cost, or having their midstream company charge their production company high prices for their transportation/services.  Wouldn't be surprised at all if they were doing BOTH.

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Permalink Reply by Dave in Ohio on July 19, 2020 at 7:50am

If you happen to know a law firm that wants to put together a class action against them in Ohio, I would eagerly line up.  They have been taking enormous deductions from me for years.  The average for 2020 YTD is 60%, with the high being 83%.

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Permalink Reply by Nancy Mosley on July 19, 2020 at 7:56am

I was just told that "TRN3" means transportation to get a better price. This is supposed to be allowed under the Market Enhancement type clause.

The "PRC2" is a charge for gas which contains natural gas liquids where they take this gas which can't be processed as methane because of the extra NGL and process out the NGL. There is a charge (PRC2) for this which is a deduction. There is a payment for the NGL which Antero calls "PPR" (plant products). This is also supposed to be allowed under the Market Enhancement type clause.

I am not an attorney so I am not sure how legal all this is if the company were challenged. However there are a lot of attorneys who negotiate Market Enhancement Clauses.

My minerals are not in Ohio.

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Permalink Reply by Dave in Ohio on July 19, 2020 at 8:08am

The Market Enhancement clause essentially negates the gross royalty/deduction-free language, and the fact that Antero offers such language as if it is somehow a compromise should indicate how dishonest their practices are.  It is simply a bait-and-switch. 

Just to reinforce what everybody else here is saying, the only protection you will have as soon as your signature is on that paper is to have the most rock solid lease you can get.  All of the friendliness disappears as soon as you sign the lease, and from that point forward they will squeeze everything they can from you.  

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