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Thursday, March 25, 2010

PA Supreme Court Rules In Favor Of Gas Companies In Royalty Payment Dispute

Landowners Lose In Supreme Court Decision
The Pennsylvania Supreme Court has affirmed a ruling against landowners (Lessors) and ruled in favor of the Oil & Gas Companies on a question of charging the landowner for a share of the costs to take the oil or gas product to market, effectively allowing the companies to pay less than the 1/8th royalty called for in PA State Law. You can read the SUPREME COURT DECISION HERE.
Find out more about how royalties work and what this Supreme Court Decision means to the landowner with a lease or wanting to lease at this meeting in Shinglehouse on Saturday.


Anonymous said...

Yes sir; I can see it now. You’ll be charged 50% of the cost and have to pay them your 1/8th plus extra to get rid of your gas.

Anonymous said...


Anonymous said...

Someone help me to understand what this means. Does this mean that the landowner has to help pay the sell it?

Anonymous said...

Even for drilling for it also?
Guess we don't get some thing for nothing!

Anonymous said...

It's whatever is written in your lease. Read it and understand it. If you don't understand it, pay a lawyer a couple thousand to explain it to you. It will be money well spent.

Furthermore, who is leasing for 12.5% royalty anymore? I have one lease at 20% and 2 more at 18%.


Anonymous said...

--primary term of 5 years w/ ROFR
--20% royalty, free of production cost/gross proceeds
--full notice of operations
--3 separate guaranteed yearly payments of bonus
--shut-in royalty of $100/ac. per each 180-day shut-in period

:) :) :) :) :)

Ugotta B Kiddin said...

My interpretation is that the landowner will have the amount of their payment calculated from the value of the gas at market instead of at the wellhead, which means that the payment will be made after the gas companies have deducted for the transport and handling of the gas.

For example: If gas was $1 per cubic foot and your lease said you got 10% you would get 10 cents out of each cubic foot extracted at the wellhead. But if they add in the cost of processing....drilling, transport , etc.and decided at the market that they could get $1 per cubic foot, but it costs them 50 cents per CF to get the gas to market , the landowner would get 10% of the remaining 50 cents, or a nickel per CF. The illogical thing about this is that they drill ad extract the gas in PA.....add in the cost to transport it to a station, which could be in Kentucky and then they charge the end use a fee to transport the gas back to their home in PA.

Anonymous said...

That green advertisement is funny. Of course there is no charge to attend. They are trying to sign up property owners and then profit as the middle men in the deal. Why would they charge to attend? They'll do their charging when the time is right.

Anonymous said...

Gas Companies hate leasing groups. Those people know all the tricks to get a good lease. Individuals who haven't been schooled are easier to take advantage of.