Royalty Payments of “1/8-th” or More, Not Always Forthcoming

by Duane Nichols on December 26, 2016

Uncompleted Well Pad in State Forest

Gas Company Wants New Ruling on W.Va. Royalties

From an Article of the Associated Press, WV Public Broadcasting, December 22, 2016

A Pittsburgh-based natural gas producer has asked West Virginia’s top court to reconsider its recent ruling that gas companies cannot take deductions for post-production costs from royalty payments to the state’s landowners for mineral rights.

The State Journal reports EQT Production Co. wants the Supreme Court to withdraw its November ruling and rehear the case.

The ruling was requested by the U.S. District Court for the Northern District of West Virginia, where Patrick Leggett and several other mineral rights owners sued EQT, arguing the company was improperly deducting fees from royalty payments.

Leggett owns a farm in Doddridge County where EQT has about 20 wells. He says the company deducted 25 to 30 percent from royalty payments for years.

EQT’s lawyers argue the court misinterpreted state law.

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Pa. still fighting over royalty money from forest drilling

From an Article by Marie Cusick, PA StateImpact NPR, December 19, 2016

Photo: An uncompleted well pad in the Loyalsock State Forest.

The Commonwealth of Pennsylvania continues to haggle with natural gas companies over royalty money it believes it’s owed from drilling on state land.

There are 386,000 acres of publicly-owned forest land leased to gas companies, and like private landowners, the state has had problems getting paid properly.

In September StateImpact Pennsylvania reported the Department of Conservation and Natural Resources (DCNR), which manages state forests, recovered $1.3 million in royalty money over the past year, after ramping up auditing efforts and hiring a new accountant to oversee the issue.

In the past three months, the department has recovered another $150,000.  “As the DCNR identifies discrepancies in the amounts received, it works toward a resolution,” department spokesman Terry Brady writes in an email. “Pending audits and resolutions may result in the collection of additional corrected royalty amounts. ”

The department has repeatedly declined to say how much money it believes it’s still owed.

A 2014 report by StateImpact Pennsylvania shows DCNR has spent years disputing payments made by some drillers. Internal emails show the agency complaining about inaccurate or murky reporting on everything from how much gas is produced at wells, to its selling price.

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