It seems that there isn’t much in the way of a legislative fix for mineral owners to make oil and gas companies “honest”. We continue to hear of people who are getting zero dollars royalty for small and older wells. OK. Why? Isn’t that a definition of not economic? And, if not economic, the well(s) should revert back to the mineral owner.
That seems to zoom right over the operators heads and most mineral owners to boot. When prices are this low then the operator has an obligation to shut the well in until prices improve or release the lease and let the mineral owner have it back. Instead they are gaming the system. Excessive post-production expenses are charged against the property and even in some cases results in YOU owing the operator!!! This was the elephant in the room no one talked about. You all thought oil was going to be $100 a barrel forever and everyone would make money. It is clear that there is a systematic looting of the mineral owners share that is industry wide. I see no real fix after the barn door has been opened. This was things you must address before the lease is signed.
This is where mineral owners really have fallen flat. DON’T LEASE WITH POST-PRODUCTION EXPENSES! Make provisions in the lease that requires a MINIMUM annual payment that increases over time. Yes, I’ll let you get by in year 1 for a few thousand minimum royalty. But next year that doubles and the next and the next. Leaving the mineral owner to languish for years or paying a pittance to “hold” a lease is wrong. Don’t let them do it to you.
