Royalty owners notice deductions from payments
Thursday, April 7, 2016
The ups and downs of the oil and gas industry have created a bumpy ride for royalty owners.
Pittsburgh Post-Gazette PowerSource reports that the National Association of Royalty Owners Pennsylvania chapter met March 30-April 1 to discuss how landowners should manage their royalties. Natural gas operators will deduct post-production costs from monthly royalty checks, sometimes leaving royalty owners with a fraction of what they think they should be getting.
According to the source, convention attendees pitched in money for Pennsylvania House Bill 1391, which would forbid deductions from royalty shares below Pennsylvania’s statutory minimum of 12.5 percent.
Read more: Pittsburgh Post-Gazette PowerSource > Gas leaseholders band together to keep threats to royalties at bay
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.