Chesapeake has changed the format of their royalty statements and now there is an easier to read breakdown of deductions. I notice that for us, there are deductions for “Transportation” and for “Fuel Mainline.” I have read on some legal websites that OK law prevents deductions but I also know that the lease language plays a role. How can I determine if my leases allow these deductions or not? They are fairly old.
Theoretically, if your old lease says gross proceeds, then you shouldn’t have deductions. That being said, companies seem to try all sorts of ways to get around that.
Steve, Would need to review lease and the deductions. Some companies have a history of hiding the ball with deductions.
Currently in litigation with Chesapeake on a similar issue.
I know I will have to take this to my attorney, but I wonder if any of you sharpshooters can tell from this clip of the germane portion of the 1977 lease if I even have a chance to challenge deductions.
Generally speaking that is a gross proceeds lease and they usually don’t have post production charges. Depends upon the operator. Take it to the attorney.