Yeah, me again! I finally got my first check today for minerals starting in November 2020! Thanks to all that have helped me so much to get to this point. Many thanks! Now for my new problem. The check came with no less than 9 pages of gibberish that might as well been written in Chinese. Is there a resource anywhere that deciphers all the strange acronyms and abbreviations they use? Common ones are: SEV SCH CON GTH ELEC ADV TRN GTH with many more. Under Column PC there are O G C3 NC4 C4 C2 C5. Any help would be appreciated.
Many companies have a legend at the beginning of the check or at the end of the check that explains the abbreviations. If not, call the operator and get them to walk through it with you and write them down. Here are a few of them: SEV-Severance tax CON-might be condensate ELEC-might be Electricity fees GTH-might be Gathering fees TRN-might be Transportation O=Oil G=Gas (usually methane CH4) The C ones are the breakout of the different gas components-ethane (C2H6), propane (C3H8), butane (C4H10), iso butane (HC(CH3)3-might be that NC4 one) and pentane (C5H12). They are split out of the gas stream at the gas processing plant and sold for different prices. (Think of a dairy processing the milk stream and splitting out the different milk products such as milk, cream, butter, etc.)
Don: there is almost always a key at the bottom of the page that tells you what each abbreviation means. They usually relate to various post-production costs. For example, SEV is probably severance tax, If that’s missing, try the company’s website. If that doesn’t work, call or email the land department or customer service for royalty owners at the phone number or email address on the company’s website and ask for definitions.
Thanks so much, I did find it at the bottom of page 9 in small print.
My first check has left me with more questions than answers. Others on this forum have stated that it was simple, #barrels times spot price times mineral interest decimal period.
It appears that was bad information. I seem to be paying for things ranging from electricity to treatment. Also “gathering” and “transportation” and “severence tax”. whatever the heck those things are. Surely there is a breakout saying what the heck I am getting for paying for “gathering”.
It appears that everyone else is getting paid well for many things and the original information I had received is very wrong. I can easily see where some months I may well have to write them a check! How disappointing. I never even thought it would take hiring someone just to understand the billing! The most accurate guidance I got here was to just wait until you get the check, and not to try to figure it out! 
Severance tax is assessed by state on oil and gas revenues and all owners, both working interests and royalty owners, pay their share. Similar in a sense to sales taxes. There are a number of threads on this site discussing post-production costs, such as gathering, processing and transportation, which can be charged to royalty owners unless prohibited by your lease language or state law. Some states such as Texas charge ad valorem or property taxes directly to royalty owners. Other states charge 100% to the operator and those are passed through to royalty owners. New Mexico and Oklahoma require the operator to withhold state income taxes from out-of-state owners.
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Some states such as TX have laws that lean toward all royalty owners paying post production charges unless you have a particular clause that prevents them. Other states such as OK, are an “implied covenant to market” state which generally means that the operator pays the post production charges and the mineral owner does not unless the lease has a clause that allows the charges. Your lease has very important clauses, so they are the rules that pertain to you.
After you determine what the abbreviations mean, check your lease to determine what they can and cannot deduct from your royalties. These lease paragraphs regarding costs are not always simple to interpret and have often been subject to Court interpretation. Thus, you may need an attorney’s input on what costs are allowed and what costs are not.
Why would a company pay to process/transport YOUR oil & gas at no charge? If you want to come get it from the well feel free!
My reading comprehension skills aren’t what they used to be, but it almost sounds like you are complaining about the quality of the very free help that you asked for on this forum.
This isn’t Barnett Shale. You own in oil wells. There is no chance that your costs are going to be a large % of your overall revenue. Do you have to pay 7%-ish taxes, same as the operator? Yes. Do all the gas/ngl deductions make the check more complicated/lengthy? Yes. Are your diamond shoes too tight and all the $100s making your wallet too fat? Perhaps.
Break out Excel. Go through the math until it makes sense. Every subsequent check will be easier and easier. In the end if you think you are going to lose money I’m sure we can crowdsource up some funds and buy your minerals.
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Sorry if it sounded like complaining, that was NOT my intent. I have went from a person so dumb I am not sure I even knew the color of crude to a person that feels comfortable. I got so used to getting instant good advice I failed to question the advice as did no one else. The advice simply stated that all the costs, drilling the well, wastewater disposal, transportation of crude to market, etc was was paid from the operator from THEIR 80%. Sounded reasonable enough to me, so it was a surprise. Bear with me, this forum has been the most valuable asset I have enjoyed, no exceptions, including YOU NMOILBOY! Thanks for all you do here!
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