One thing I have learned over the years, I consider the royalty income a bonus, I do not use it to budget anything. My royalty payments have gone down since the first discovery and check. Your first royalty checks are your best checks you will get, after that they depreciate monthly as stated in the previous e mail by "Neverybilly". Eventually the royalties will slow to the point the well will become unprofitable for the oil company to continue production and they will close it in, STOP OR REDUCE PRODUCTION when the price of oil/gas goes down at it has below $40.00 a barrel as" mentioned in an earlier e mail about chocked in."
CHEATING ROYALITY OWNERS; I had a concern about this with Cimarex. my attorney reviewed all our royalty payments against what was filed with the State of Texas and found everything was accurate for now.
Who are the oil companies Cheating owners?
Mike
But it was OK for you to call a responder a yahoo? Your family has had royalties since the 30’s yet you don’t understand how volatile the oil business is and that you can’t count on it as steady income? It takes better planning and political savvy to sustain retirement, especially if you’re counting on oil revenue.
Yes, royalty income should be invested to build your family's nest egg. We did spend some to send our kids to the university and law school, but that is pretty much the extent of it. I consider it money well spent.
In the question of being nickeled and dimed on production costs, the oil companies have passed us around like an old maid at a barn dance. Our contracts were crafted by some of the best lawyers in Texas. But, I doubt if the current oil company working our land even has a copy of that contract. They pretty much apply those charges to everyone. While we could possibly sue them, the chance of recovering is slim, and legal expenses would probably exceed the recovery.
It is what it is.
Lynn, don't leave the site due to comments as this is a great place to learn about the industry and what takes place. Each person here has a lot of knowledge and experience in the oil/gas industry. Don't let one comments drive you away. However, we are business persons who support the economics of this country and have a difficult time watching the current
politics destroy the U. S.A.
Mike