I have a lease with Jay Bee in the Doc 6 Well. They take on average 25 to 30 percent of my check for deductions. Just wondering if anyone else has wells in Tyler and surrounding counties that would share their deductions to see if this is about the average cost on gathering and processing.
Also, this was supposed to have been a 15% gross lease we negotiated. I even have the email 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 therefrom 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 before. So in talking to their 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?