The only ones getting rich off fracking are the top level executives in the fracking companies, investment bankers, some shareholders and a few large landowners who have the capacity to audit their royalty receipts. Without the capacity to audit, you are almost certainly getting shorted.
We tried to tell you this. For people who live in neighborhoods and on small acreage, your royalties will not compensate you for loss of property value much less the loss of serenity and possible health impacts.
Cheating royalty owners is widespread.
Landowners upset over unpaid royalties in the Barnett Shale
by BRETT SHIPP
WFAA
Posted on October 25, 2012
Prediction: Included in the next job numbers from the fracking industry will be a rash of new companies that audit people’s royalty receipts. It’s American to create new jobs.
Also see: Who wants to be a SHALEionaire?
About Sharon Wilson
Sharon Wilson is considered a leading citizen expert on the impacts of shale oil and gas extraction. She is the go-to person whether it’s top EPA officials from D.C., national and international news networks, or residents facing the shock of eminent domain and the devastating environmental effects of natural gas development in their backyards.
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Concerning “Landowners upset over unpaid royalties in the Barnett Shale” article, I propose the following:
+ That a website be set up where landowners can post their contracts.
+ The same website can post well production figures associated with the posted contracts.
+ An estimate of the royalties due each landowner based upon their contracts be updated on a month-by-month basis.
+ An online forum be created on aforementioned web site that would allow the landowners to question or discuss issues surrounding their expected royalty payments.
+ That the online forum be “data-mined” for emerging patterns of “royalty-abuse”.
+ That the website pay for itself by charging “well royalty auditors” and lawyers a fee for advertising and “data-mining”.
+ That the website post a sample royalty contract that not only protects parties in the contract, but also mandates both an auditing agency and allowing the posting of the contract on websites the likes of which I’ve just described.
See, I can be a “job creator” as well.
Nice job creating safe jobs for workers. Sounds like these jobs need workers with big brains. Sounds like a good job for you.
Good idea, but the data you will be evaluating only includes data given to you by the frackers. Your evaluation cannot include other factors such as:
1. Mis-read or faulty production meters.
2. Faulty lease line identification such as made by the local “appreaisal district” or the oil/gas company.
3. Underground commingling of production zones–choke off a well and send the gas laterally to another well where it is produced at another lease(meter) where the royalties are less.
4. Value of gas including the included CO2, H2S, etc.
5. Others, including such things as taxes charged by the local taxing authority–which must be substracted from the paid royalties to get a net value of the paid royalties.
5. Royalty payors do not clearly identify which well(or meter) the royalty money is paid for.
Sounds like an opportunity ripe for “job creators” such as us. If you can already identify such deficiencies as cited above, then perhaps using Japanese quality-control practices such as “kaizen” said deficiencies can be reduced or eliminated over time. One has to start somewhere or nothing will get done except “royalty theft” will continue unabated.
Why don’t lawyers and such band together to sponsor organizations such as what I proposed above and reap the rewards of open-source and collaborative information. Hell, Facebook has changed the way that social interactions can take place, why not a “social” equivalent to that on the “royalty auditing” front?
United we stand, divided we fall…
Well, KQ above–it’s good to see your interest. Keep up the good work. Will help where possible. Try to inform the royalty owners that they are being screwed, blued, and tattoed at every turn in the road–and they don’t even know what is going on. This underpayment of royalty has been going on since the onset of O&G production in the U.S.
Most appraisal districts do not do their own mineral appraisals. Tarrant & Denton County Texas, as well as many others located throughout the US, are appraised by Pritchard & Abbot, located in Fort Worth, TX. I personally spoke with one of their reps years ago and learned that they rely on data that comes directly from the energy companies to establish appraisals, then forward that information to the counties. They also rely on information from the Texas RRC which is given from the producing energy company. The energy companies control ALL data. http://www.pandai.com/home.aspx
Do you want to stop fracking? go to http://www.sovereignpeople.net The fastest growing antifracking movement in New York State and other states are quickly following our lead. Make no mistake, fracking will be outlawed. We’re moving full speed ahead with this.