Lease Terms:

Terms of an oil and gas lease

Wooden Gavel

PA Mineral Owner Wins Challenge on Royalty Deductions

by Will Brackett

For more than four years, the natural gas company tapping the Marcellus Shale beneath Paul Sidorek’s 150-acre property in rural northeastern Pennsylvania took deductions for preparing and shipping his share of the gas. The deductions reduced his royalties by $5,000 a month, sometimes more.

Mr. Sidorek, an accountant, contested the charges and in September, the arbitrator who heard the case agreed with him.

The wells’ operator, Chesapeake Energy Corp., had breached the terms of the lease agreement, the arbitrator found. He ordered the Oklahoma-based company to repay all of Mr. Sidorek’s past deductions and to stop taking them in the future.

Read more here from the Pittsburgh Post-Gazette

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