Royalty calculations and deductions

I received my royalty payment from EQT for August. My rate is 17.5% of the net. The gathering fee for the well was $154,579. The revenue for the well was $530,719. My owner percentage is .009557% and distribution is .009557% So my gross on it was $50.72 Deductions were $14.77 Taxes were $.76 So that’s 29% in gathering fee deductions. Is there a cap on deductions because technically I could end up owing them? Then I don’t understand the calculation of revenue x owner% x distribution % Shouldn’t it be revenue x owner% x .175 = my royalty And for August the gas was sold at $1.10 per MCF Any input would be appreciated. I would be way further ahead at 12.5% and no deductions.

Thank you

@Darren_Ferrell, the 0.00009557 is your “NRI” (net royalty interest), which is calculated from your ownership% and royalty and possibly other factors. $530719 x 0.00009557 = $50.72 (your gross) $154579 x 0.00009557 = $14.77 (your deductions) Unfortunately the 29% deduction is often typical for natural gas royalty calculations. Yes, a lower royalty with “no deductions”, might work out better, but it is often hard to get this agreement in your lease and often harder to enforce it.

Hey thanks Pete. I’m going to hope gas comes back up lol. On a better note i did figure out they had my lease ownership at 1/28th and it should be 1/14th so It looks like they will double be doubling my royalty on those wells. Then I would assume they will go back the previous 18 months checks and correct them. Could be a Merry Christmas if I don’t have to get a lawyer.