I get royalties from Continental on the Hundley 1-20 in 20-1N-5W in Stephens Co., OK. My check stub indicates they take a transportation deduction on gas. This month the deduction for 8,000 MCF was about 70% and on the same check for 26,000 MCF it was only about 7%. How could this deduction vary by so much? How could one be so high as to approach 100%?
The deductions depend upon what is allowed in your lease and also what contract the operator has with their transportation company. I have seen deductions be up to 200-300% (in another state) depending upon market conditions.
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Many issues come into consideration that can be highly technical. These can range from gathering and transportation agreements, compression, dehydration and treating along with sales and marketing charges. If there is enough value to you, then I would suggest getting a qualified professional involved for further analysis.
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