Russ Forba opened his natural gas royalty statement on Monday and got a bitter surprise.
Mr. Forba was featured in a Post-Gazette article on Sunday describing nine months when Chesapeake Energy Corp. calculated that the costs of piping and marketing the Marcellus Shale gas extracted from beneath his family’s northeastern Pennsylvania farm exceeded — by $112,000 — the family’s share of the gas sales.
The family received no checks from Chesapeake during those months, when the company sold more than 2 billion cubic feet of gas from under the farm, but the Oklahoma-based oil and gas operator assured the family it had zeroed out the negative balance.
The company said it is its practice not to use past costs in such cases to offset future royalties and, until Monday, it had applied that policy to the Forba family.
But the monthly statement Mr. Forba opened this week showed that Chesapeake had revised down the selling price and revised up the post-production expenses from April 2015, a month when the family already received no royalty because costs outweighed sales.
Now, Chesapeake reduced his family’s current royalty by $5,700 to recover those costs.Click here to continue reading.
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