Western PA Farmers Talk About Deductions, Falling Royalties

The same old issue keeps returning in Pennsylvania for landowners and rights owners. The Pennsylvania Minimum Royalty Act guarantees payments to all rights owners of at least 12.5% of the value of the produced gas. Yet contracts signed by many landowners allow for post-production deductions, and those deductions sometimes (often?) result in landowners receiving less than 12.5% in royalty payments. This issue has been a thorn of contention between landowners and drillers for years--two groups that are normally allies. Farmers/landowners from several western PA counties gathered yesterday at the Washington County Farm Bureau's annual legislative meeting to discuss, among other issues, minimum royalties.

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