Review, Verify, Understand: Tips for the Mineral Owner (Week 1: Tim Greene)

Started January 25, 2017 at 12:03 pm by in Marcellus Shale

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01/25/17 12:03:18PM

by ShaleForum

If you’re a mineral owner, you will know that management of your minerals can be a complex issue. From a legal perspective, it is important to know the rights of mineral ownership, particularly if you’re already receiving royalty payments from leasing your assets. Understanding the more intricate details of ownership will ultimately help to ensure that you can maximise your income, as well as prevent you from being cheated out of any income that is rightfully yours.

With this in mind, we’ll be taking the next few weeks to share some tips from professionals in various states that covers. This should provide our readers with some useful guidelines for mineral ownership. Today’s professional is Tim Greene.

Tim is currently the managing member of Land and Mineral Management of Appalachia, LLC. (LMMA). LMMA works with mineral and surface owners throughout Appalachia and beyond with Mineral Lease/Pipeline Agreement negotiations and the ongoing issues concerning surface and mineral assets. I work as an Oil & Gas Coach, educating Surface and Mineral Owners regarding how to work with the Oil & Gas Industry. Tim has 31 Years of Experience involving the Oil & Gas Industry.

Tim’s Tip’s

  1. Review the deductions being taken each and every month. (Depending on the lease, deductions may or may not be authorized)
  2. Understand what each column means. each statement has several columns but each company may have a different looking statement. In Appalachia the statements are not standard. Legislation has been introduced in the past to standardize them but has not been successful so far.
  3. Verify the well the production is coming from; if you are not getting paid from a well you own interest in you would be expected to pay back any money.
  4. Check the price per mcf with other owners in the area. Or at least with public information
  5. Compare the total check to the previous months checks and if there is a significant difference contact the company to determine “why” a check is higher or lower.
  6. Hire a professional with oil and gas EXPERIENCE, not someone with just a law or accounting degree. It’s vital they have the experience to understand what the statement is telling a mineral owner and the experience to ask the appropriate questions to determine how the amounts on the statement were determined. Be cautious of those that claim to be Oil & Gas expert just when the industry is active.

If you have a question for Tim, follow him and send him a message on his ShaleForum profile….

If you're interested in contributing to a Top Tips piece on ShaleForum, message me.

01/26/17 11:06:43AM @pete:

that would be great if the deductions were listed along with the actual production, along with with price paid and market price

Leo Schumacher
01/26/17 01:27:54PM @leo:

How does a person check the price per MCF for Marcellus shale gas in WV?  I know it is not the same price as the NYMEX index.  Where can Marcellus shale gas prices be found?

01/26/17 02:14:28PM @pete:

nymex and the henry hub are good places for gas prices

Leo Schumacher
01/26/17 02:17:41PM @leo:

Does the Henry Hub and Nymex contain the price of Marcellus gas?  I did not find it.  I know the price of Marcellus gas is different than what both Nymex and Henry Hub lists.  I specially want to know, am looking for, the posted prices of oil and gas that comes from the Marcellus

01/26/17 02:24:16PM @pete:

natural gas is paid by decatherms and the marcellus is about a 1.2
which would be a multiplier on the price of the gas,  pipeline quality is 1000 btu per mcf of gas, the producers are getting better than market price

Leo Schumacher
01/26/17 02:35:08PM @leo:

Thanks again.  If the producers are getting better than market price, why is the royalty calcuations that many people are getting, using a price that is approximately 40% of the published NYMEX prices?  Again, is there a published monthly price index for the Marcellus?  How do people verify the prices used in their monthly royalty statements are correct?

01/26/17 02:40:04PM @pete:

that is all you can gauge your price against and unless it is wrote in your lease i guess they can say they sold it at any price -- Chesapeake comes to mind
and was famous for selling to themselves for below market value

03/13/17 09:24:14AM @pete:

here is an answer from eqt on the price they are paying
Price is a Market Index Price we get from the Platts Inside FERC Gas Market Report.

01/26/17 02:32:52PM @pete:

hope this will help explain it




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