Understanding How You Receive A Gas Royalty

When property owners discover natural gas resources on their property, there are several beneficial scenarios to help protect the owner’s rights. In most cases, a production company that specializes with the extraction of these resources will offer a fair price to the land owner and provide them with a Gas Royalty based on the value of the resources when the agreement is made. If you were promised these royalties and haven’t received them after a significant period of time, you should contact Edward L White PC Attorney At Law today.

How Does This Work?
1. Evaluation: An exploration team visits your property to determine whether the discovered product is viable. Diagnostic testing and chemical analysis are performed to make this distinction. After it is determined that you have a natural gas resource on your property, the exploration team determines in which areas of your property possess it.

2. Options: You can sell your property to a royalty trust company, exploration or production company, or lease sections of the land to these organizations. If you choose to sell, you may receive a smaller portion of royalties. You should allow your attorney to review any contracts presented to retain your rights to your property and to ensure that you acquire fair share of gas royalties based on the portion of the affected land you own.

3. Gas Royalty Values: You will not receive the total value of the gas product in royalties. The way the royalty is calculated is that you receive the percentage of the unit cost that you agreed upon. For example, if you agree to ten percent royalties and the market value per cubic feet is $5; you receive ten percent of that unit value based on the amount of the land you own.

If you are denied any gas royalties after you sell your property, you have the right to file a lawsuit to acquire the values you were promised in your contract. A common issue that emerges in these cases that cause conflict is a failure on the land owner’s part to obtain a legally binding contract that is reviewed by their legal counsel. If you wish to consult an attorney today visit us. Tweet us on Twitter!

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