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Permalink Reply by The_Baron on October 26, 2009 at 8:05

The clause should go on to discuss royalties on gas. read on.

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Permalink Reply by The_Baron on October 26, 2009 at 8:07

from my standard form:

on gas, including casinghead gas, or other gaseous substance produced from said land and sold or used off the premises or for the extraction of gasoline or other products therefrom, the market value at the well of one-eighth of the gas so sold or used, provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale; such gas, casinghead gas, residue gas, or gas of any other nature or description whatsoever, as may be disposed of for no consideration to Lessee, either through unavoidable waste or leakage, or in order to recover oil or other liquid hydrocarbons, or returned to the ground, shall not be deemed to have been sold or used either on or off the premises within the meaning of this paragraph 4 hereof

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Permalink Reply by The_Baron on October 26, 2009 at 8:08

The amount realized can be the amount after compression, treatment, dewatering, etc.

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Permalink Reply by RONNY on October 26, 2009 at 8:51

Thank you Baron. That one sentence containing the "amount realized from such sale" was what I didn't catch after reading this thing three times. Is it possible to estimate expenses as a percentage of sales?

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Permalink Reply by The_Baron on October 26, 2009 at 9:13

No. Depends on the well. Depends on the Operator.

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