Can anyone tell me if the post production cost percentage changes by as much as 10 percent per year ? Thanks Monte
It can, but it also raises a red flag. It costs money to get gas to market. Early on, the PPC may be small, but as time goes on, it takes more and more effort to keep the gas flowing through the pipelines as the pressure on a well drops. Also, many gas processing plants have raised their gate fees, so that can explain a big jump.
I have a lease with Jay Bee in the Doc 6 Well they take on average 25 to 30 percent of my check for deduction’s , just wondering if anyone else has wells in Tyler county share there deductions.
Rick,
Unfortunately, deductions are quite common, though I do not think there is a set percentage, so much depends on the terms of the lease.
Thank you for the reply, Yes this was supposed to have be 15% Gross lease we negotiated, even have the E-Mail where the company rep says since i took the lower royalty percentage it would be a Gross no deduction lease, here is the wording
The Lessee shall deliver to the credit of the Lessor free of cost, in the pipeline to which he may connect his wells, the equal fifteen percent (15%) of all oil and gas produced and saved from leased premises, payable quarterly; provided, Lessee shall pay Lessor a royalty at the rate of Fifty Dollars ($50.00) per year on each gas well while, through lack of market, gas there from is not sold or used off the premises, and while said royalty is being so paid said well shall be held to be a paying well.
January of this year they started showing deductions they had never shown them before so in talking to there main office i was told they have always taken deductions out that the reporting law had changed so they have to show deductions on the royalty statements the amount i thought was Gross was actually after deductions so i never could tell they had been taking deductions since 2016 when the well started production, i thought they always had to show deductions. i would appreciate any input on this wording of the lease is it a Gross lease or Net lease,
Rick,
I am NOT an Attorney and would be remiss in attempting to provide any input on a lease / pooling modification. Especially since you have the email that you mention, I urge you to contact an Oil & Gas Attorney to contact the producer on your behalf. If you scroll through this site, you will find various Attorneys that have been recommended by others.
Appreciate your input, I sent the Manager at Jay Bee an E-mail explaining the situation see if he could help straighten it out, since i negotiated the lease with him and knows it is a Gross Lease, Will see if they will respond. take it from there.
Thank you.