Guest Post: Bradford Co Landowner Asks Gov. Wolf to Support HB 1684
MDN has written plenty about Pennsylvania’s HB 1684–the Guaranteed Minimum Royalty Act (see these MDN articles). In essence, some companies (cough *Chesapeake Energy* cough) have gotten creative with deducting post-production costs from royalty checks. According to the PA Guaranteed Minimum Royalty Act of 1979, royalty owners (landowners) must receive no less than 1/8, or 12.5%, by law. But when Chessy and others start deducting this and that, never spelled out in the original lease agreement, landowners are getting the shaft–way lower than 12.5%. In some cases they get royalty checks for a few dollars! Bradford County landowner John Williams is concerned, both about HB 1684 and newly elected Gov. Tom Wolf’s stand on that bill, and about Wolf’s proposed 5% severance tax. Will the severance tax be the next deduction gas companies take, further reducing royalty checks? Is the severance tax Tom Wolf proposes a tax that will be paid, in essence, by landowners? We thank John for his guest post…
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Magnum Hunter Resources (MHR), a small but growing driller in the Marcellus/Utica, gave one day’s notice and then convened a phone call with investors last Friday to declare they’re not spending a dime on new drilling in 2015–until the prices charged by oilfield services companies (the companies that do the drilling and fracking) come down–a lot. MHR CEO Gary Evans said he’s looking for a 40% discount compared to what the company paid in 2014 for the same services–and until they get it, the drill rigs for MHR will be idled. But have no fear, production for the company (meaning revenue) will continue to grow each quarter in 2015 because of wells already drilled and shut-in, waiting to be connected to pipelines…
Big news in the midstream (pipelines and processing plants) world. Today, Energy Transfer Partners (ETP) announced they are merging with and buying Regency Energy Partners in a deal with a total value of $24.8 billion–$18 billion in stock and cash, and $6.8 billion in assumed Regency debts. You may recognize both names, as both companies are active in the Marcellus and Utica Shale…
Well, don’t say we didn’t warn you. In November MDN brought you the news that Chevron announced the are “restructuring” their northeast business until to “become more efficient” and for “long-term growth.” We pointed out at the time that kind of language doesn’t inspire confidence (see