Hello,
If the oil and gas rights are owned separately, and a gas well is producing condensate, to which rightholder are royalties for the condensate owed? I can see arguments both ways. On the one hand, the condensate is in some sense derived from the gas, which suggests that the owner of the gas rights should receive the royalties. On the other hand, my understanding is that condensate royalties are generally paid as would be crude oil rights, and a lease of the gas rights might not even have any royalty provision for “oil,” which suggests that the royalties could go to the owner of the oil rights.
Thanks.