Proper Revenue

Proper Revenue

Recent landowners have approached our firm with familiar turn on the most common concern that royalty owners have: Am I being paid the correct amount of my royalties?

We have not had the chance to view and review a series of oil and gas leases signed by landowners in Eastern Ohio with a company called EOG Resources. These leases required that the oil and gas operator would pay their royalty owners based on the “revenue” received by the company.

What does that mean? In most contexts the term “revenue” alone means a total or gross amount of money received for some item. First XTO and now Ascent Resources have taken assignments of most of those older EOG leases and taken the opportunity to deduct post-production costs from those royalty owners despite only the general reference to revenue in the lease language.

Our firm has taken the position that the “revenue” language used by EOG in those leases does not allow the deduction of post-production costs from royalty payments and we are currently pursuing these cases.

A twist on these cases has been that these leases have tended to have arbitration clauses which may limit the ability to pursue these cases on a class-action basis. That means it might be necessary to pursue these matters on an individual case-by-case basis. Toward that end, we need to hear from landowners.

Did you sign a lease with EOG Resources? Is Ascent Resources or some other oil and gas operator now deducting post-productions costs from your royalty share? If so, you should call us and let us review your situation. We may be able to help recover past monies for you and help prevent the deduction of future costs from your royalties.

Are you receiving your proper "revenue" from your oil and gas lease?