Oasis Transportation Charges

Montana Mineral Rights Richland County, MT
1

For the past several months Oasis Petroleum has deducted transportation charges from my royalties in Montana. A year or so ago, they started taking CMG deductions. No notice or rationale, just began deducting.

Wells have been in production for many years without these deductions until Oasis purchased leases several years ago.

Lease states for oil: "free of cost in the pipe line"

Lease states for gas: "market price at the well for the gas sold"

Contacted attorney about CMG charges and they said I have a case since old company did not charge the CMG. But, it could get expensive for such a small deduction.

Now, Oasis has begun deductions for transportation (about 4%). No rational or notice.

Anybody else experiencing this? What is the latest on the allow-ability of these deductions?

2

I am new to Oasis, but have received royalty payments from other companies for some time. It appears to me that the CMG charge is associated with production of gas and plant products, not oil. Oasis explains CMG as a charge for compression, gathering and treating. Whiting has something similar, i.e., CP, for compression charges, and GT for gathering. XTO has a charge (deduction) for compression. Oasis is the only company with whom I do business that has a transportation charge. I am going to review lease documents and do some other digging for clarification.

3

Thanks. Please let me know what you find. Yes, Oasis is the only company that has begun to charge transportation. Maybe they are testing the waters.