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legis.state.wv.us – WV state legislature official site

futuresource.com – up to the minute information on commodity quotes, charts, news and other relevant information

wvgs.wvnet.edu – WV geological & economic survey official site

dep.wv.gov – WV Department of Environmental Protection official site

mineralweb.com – “Insight for Mineral Owners Rights” Oil & Gas Mineral Services

gomarcellusshale.com – All people, companies & places related to the Marcellus Shale

PostHeaderIconWhat Post Production Deductions will Do to YOU

How Post Production Deductions Affect Your Royalty Check

We advocate a cost free royalty clause whenever someone asks about a lease, so the question is what really are “Post Production Costs”?  Here is a list of some of the deductions we recently saw on a royalty check:

Compression Fee (3 different types)

Fractionation Fee

Marcellus Cone Gathering System Charges

Marcellus Flat Fee Production ($1.20)

Marcellus Post Production Cost (3 different types)

Marketing Fee

Plant Processing Fee (2 different types)

Transportation (2 different types)

This is how much a simple 12.5% royalty would be impacted by allowing for post-production costs.

Value Column Total

$2,683,820.37

$2,683,820.37

Deductions

$1,504,274.07

$0.00

Net Column Total

$975,586.07

$2,683,820.37

Unitized Royalty Percentage

0.00074607

0.00074607

Take Home Check

$727.79

$2,002.32

Net Royalty

4.54%

12.50%

 

This Royalty Owner would lose $1,274.53 a MONTH! Over HALF of what they should have gotten.