Natural gas price slump impacts Pa. landowners
Friday, September 13, 2019
Low natural gas prices have left Pennsylvania property owners with diminished royalty checks, despite record amounts of gas being pulled from the commonwealth’s shale plays, according to the Pittsburgh Post-Gazette.
The low prices, driven by a supply that has outpaced demand, have angered shareholders and forced shale companies to slow new development. Meanwhile, royalty owners have few options outside of hoping for prices to rebound.
In addition to the impact they’ve had on smaller leaseholders, larger royalty holders have felt the effects of low prices as well. As one of the largest royalty holders in Pennsylvania, the common wealth’s royalty revenue was cut in half last year, dropping from $135 million in 2014 to $67 million in 2018.
Learn more: Pittsburgh Post-Gazette > Pennsylvania landowners share the pain of low natural gas prices
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Shale FAQ
How often do royalty payments come?
Depending on the company, royalty payments can arrive monthly or quarterly.
Are my royalty payments transferable?
Yes. If you plan on selling your property, notify the gas company that is leasing your land and your realtor. They will make arrangements to allow the royalty payments to transfer to a different land owner.
What are royalties?
Royalties are payments from the gas company to the landowner as part of a lease agreement. Royalties payments cannot begin until production begins. The payments are dependent upon the market price of the resource.