Shrinking royalty payments threaten drilling in Pa. township
Monday, September 26, 2016
Sitting in the heart of heavily drilled Bradford County, Pennsylvania, Wilmot Township wants to end shale drilling for natural gas because of shrinking royalty payments.
Township officials want drilling to be cutoff at wells where landowners are receiving royalty checks for a fraction of their original value, according to National Public Radio’s State Impact Pennsylvania.
The township is home to about 70 wells in the Marcellus Shale play, according to Kallanish Energy.
Pennsylvania law gives landowners at least a 12.5 percent royalty on production. However, different lease terms may hold both drillers and landowners responsible for post-production costs from moving and processing natural gas. The additional expenses could reduce royalty payments.
Learn more: Kallanish Energy > PA township wants to halt drilling due to shrinking royalty payments
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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.