Can anyone provide a simple explanation on what is meant by “post production charges”? That seems a little vague to me. Ms. Barnes has certainly warned against it, but I’m not sure I would understand it if I did read it.
The case with Casillas and Ovintiv has been postponed again until the middle of February. But the Osage Oil and Gas person has said that they have cleared the pad and are ready to go as soon as the order is given. They sound pretty confident to me.
Oklahoma is an 'implied covenant to market" state which generally means that the operator has to get your products to market without charging you any post production charges. The operator is responsible for drilling and completing the well without charging. That gets you to the wellhead. The post production charges are charges that would be marketing, compression, dewatering, etc. etc. etc. that would get the product from the well head to the tailgate of the plant into a pipeline and get a better price in the market. In Oklahoma, they are supposed to get it to market without charging you unless they put the PPC in the lease terms so that they can charge you. I will not sign a lease that has that language as those charges can really eat up my royalties. (In other states they are allowed to charge them). In some states, the PPC are so high, they can completely eat up any royalties and you have negative royalties.
In the good old days, poolings were always gross proceeds and no post production charges were taken out. Now, you have to watch the wording of the poolings to make sure.
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