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Pennsylvania Senate passes bills to protect royalty owners

April 12, 2014

A trio of bills expanding the rights of landowners who are leased with natural gas companies passed the state Senate with an overwhelming majority this week. It awaits a House vote. State Sen....

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Apr-12-14 9:03 AM

I wonder when the 3 bills are passed by Corbett if the gas companies will be held responsible to pay back the monies lost to the landowners, that would be the right thing to do under any lease agreement. These protections should have been put in place before any drilling started in Pa. hopefully other states will use Pa. as an example of setting more forceful laws when it comes to this industry.

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Apr-12-14 9:01 AM

""12.5 percent of what? That question is not super simple to solve," he said. "Where did it get sold, who did it get sold to, how do you verify the price it was - and that it wasn't a sweetheart deal between two affiliated companies? The bottom line is, it's a very complicated process."


This will always be an issue. What if pipelines had to be paid for to get gas to market? What if compression has to be installed and it costs $0.05 to $0.30 per MMBtu to move it? What if the gas contains water, nitrogen, carbon dioxide or some impurity that requires processing at some $/MMBtu to make it meet pipeline specifications. This is a hard issue for a government to regulate.

As a royalty owner signing a contract with a gas company, I would say the gas price is based on Henry Hub prices and the gas company takes the risk and burden to get it to market. Then negotiate the royalty; I would want 20%.

Another option would be to have a working interest in the wel

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