For the past 3 months, Antero has deductions on an 18% royalty lease on properties in Wetzel and Tyler Counties which reduces the royalty payment below the 12.5% minimum royalty required by West Virginia State Law (Code 22-6-8). This 12.5% minimum was affirmed by the West Virginia Supreme Court (Leggett vs EQT). Is this happening to other people and is there any legal recourse? Is there a way to create a class action lawsuit if Antero persists in this behavior?
We signed a new lease with Antero earlier this year in Wetzel County. We’ve received no royalties thus far. As far as I can tell the land has no pads on it. We’ll be watching what happens with this.
@charlsmd We need more details about your lease agreement. You mentioned Antero is giving you 18%, but is that gross at the wellhead? Did you negotiate a “Non Post Production” or “Gross at the Wellhead” clause in the lease, or did you sign it as presented? If you didn’t remove the post-production costs, then Antero can pay you less than 18%. There are usually 6 to 7 percent fees deducted from post-production costs.
Here’s a breakdown of typical fees under post-production costs:
1. Gathering
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Cost of moving oil, gas, or NGLs from the wellhead to a central collection point or processing facility.
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Usually via pipelines or trucks.
2. Compression
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Natural gas often needs to be pressurized to move through pipelines.
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Fees cover installation, fuel, and maintenance of compressors.
3. Dehydration & Treating
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Removing water, COâ‚‚, Hâ‚‚S, nitrogen, or other impurities to meet pipeline or sales quality standards.
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Includes amine treating, glycol dehydration, and sulfur recovery.
4. Processing / Plant Fees
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For gas: fractionation or cryogenic processing to extract NGLs.
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For oil: stabilizing crude to remove light ends.
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Processing plants often charge:
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A fixed fee per unit (e.g., $/MCF or $/bbl),
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Or take an “in-kind” share of production (e.g., keep some of the liquids).
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5. Transportation
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Moving hydrocarbons from gathering/processing points to market hubs or refineries.
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Pipeline tariffs, rail, or trucking charges.
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May include “line loss” (volume lost in transit).
6. Marketing Fees
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Fees to third parties or affiliates for arranging sales, finding buyers, or blending to improve quality.
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Sometimes bundled into transportation or processing.
7. Fuel & Shrinkage
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Fuel: gas used to power compressors or other equipment.
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Shrinkage: volume lost during processing (e.g., gas volume reduced when NGLs are stripped out).
8. Storage Fees (less common in routine leases)
- If hydrocarbons are stored before sale, storage terminals may charge tank rental or throughput fees.
With you signing a lease, not removing Post Production, this can allow Antero to deduct these fees, and you can be below the 12.5%—nothing illegal about this. If you signed a Lease with “Gross at the well head” or removed the post-production, then please contact an oil and gas attorney in the State in which you receive royalties.
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Royalties are not paid until there is production. You should check the WV oil and gas commission site for pending wells and for wells that cross your acreage. Not all acreage has the actual surface location pad on it. It can be a mile or more away.
They are able to pay you less than 12.5% royalties. That number is the minimum royalty rate, except you can still have deductions, which would result in a lower payment. There are MANY leases at 12.5% with deductions resulting in a 7-8% ish income.