Trinity Operating - High Royalty Deductions


#1

When Trinity Operating took over operations from Petroquest in January, 2017, the first year or so the total percent of deductions was in the neighborhood of 27%. This has climbed to over 43% and in fact, for this year deductions are just over 43% of the gross. Is anyone else experiencing this re royalty checks from Trinity Operating?

All the leases I have executed in the last three years have a no deductions clause in them but I have no idea of where to start or who to talk to in investigating this. Does the Oklahoma Corporation Commission (or any other organization for that matter) have resources to look into these matters. Or, or am I on my own here.

Any advice appreciated.

Thanks,

Robert


#2

Go read your No deductions clause. It may say NO deductions on the first few words, but it may have a “however” clause tacked onto the end that will allow deductions.

You may need to call them. Hughes is gas territory and it takes compression, transportation, etc. to get the gas to the plants. Some companies have an automated accounting program that assigns all lessors deductions unless you demand that they reset the “buttons” for your lease terms. Legal doesn’t always talk to accounting… In general, over the life of a gas well, it will get more and more expensive to get it to market.


#3

Thank you M. Barnes!