we received our first royalty check from Comstock for the Menn PB-1H pool unit this week. The check stub has a very vague section called “Other Deductions”. I inquired what they were and was given the following answer:
The deducts are as follows-Dehydrations Fees, Compression Fees,Gathering Fees, Transportation Fees, Cost to Market Gas.
My lease agreement states:
Lessor’s royalty shall be calculated free and clear of costs and expenses for exploration, drilling, development and production, including dehydration, storage, compression, separation by mechanical means and product stabilization incurred by Lessee before the point of custody transfer and sale by Lessee. Lessor’s royalty shall bear its proportionate share of ad valorem taxes and production, severance or other excise taxes and the actual costs incurred by Lessee under an arm’s length contract, negotiated in good faith, for the sale of oil or gas produced hereunder, to transport, compress, process, stabilize, gather or treat such production.
MY QUESTION: Do I have a valid complaint that deductions were taken out that shouldn’t be? If so, how do I go about correcting it? If there is a way easier than calling my attorney, I would like to try that route first.
As always THANK YOU for the collective brain trust!!
Good Morning, we had a similar issue with the same well but just contact them and have them check your lease, etc. They have been very good about responses and correcting things for us. We have been emailing owner relations and they forward to the appropriate person. Response time has been within the same day or next day.
Comstock pays on the 27th of the month so as long as the DO is returned in enough time for them to process it then you will receive a check around that time each month.
Can you tell me when your well was spud? Mine was February 28th. I have seen three production months posted. I’m just trying to gauge when my first check should come.
This is an interesting subject. Here in ND they were following the leases, but then all of a sudden one of the bigger companies decided (and was backed by the ND Industrial Commission) that they could charge us for transportation, and all the other production fees. As a result some checks went WAY down. In one case $25000 was deducted for fees by a huge company. The State of ND does NOT pay any of these, as they made that illegal, but the citizens HAVE to pay these. So people are finally taking issue.
yup we had it added before we signed. I think they either just missed it , or were waiting to see if we would catch it. Since I have contacted them they have been pretty helpful about so hopefully it will get resolved quickly. If not, my attorney can speed them up a little lol
UPDATE: We heard back form the analyst at Comstock and they agreed it should have been cost free as stated in our royalty. It only took them a week to get it resolved and they were very polite and helpful. They will be issuing another check in the amount of the deductions they mistakenly took. I was very pleased with their timely response and action.