A few questions for the group:
— Does your lease require royalties on vented or flared gas, or only gas that’s sold? Most private leases don’t. State land leases do.
— Have you compared your royalty statements against your operator’s RRC filings on gas disposition? The data is public.
— Has anyone pursued a royalty underpayment claim based on unreported venting?
I’m relatively new to all this but in my work I came across a study by a Permian Basin petroleum engineer analyzing Texas venting and flaring data for the year ending November 2024. Operators self-reported 120 billion cubic feet of gas vented and flared. The study estimates the real number is 370–551 Bcf — 3 to 4.5 times higher.
Gas that gets vented and not reported is gas you never see a royalty on.
FWIW I believe the Texas General Land Office requires royalty payments on all gas production from state lands including volumes that are vented or flared rather than sold. Private mineral owners don’t have that protection unless they specifically negotiated it into their lease. Has anyone done that successfully?