END EXCESSIVE ROYALTY DEDUCTIONS

Pass HB 1684 because...

• Guaranteed Minimum Royalty Act (Act 60 of 1979) provides royalty owners with a guaranteed minimum one-eighth royalty for oil, natural gas or gas of any other designation in order to protect landowners from unfair or deceptive leases for the recovery of these natural resources.

• The development of unconventional shale gas wells in the Commonwealth has been accompanied by an effort by some companies to reduce royalties below the statutory minimum by transferring post-production costs to royalty owners. These are costs that are incurred between the wellhead and a final market point of sale and typically include dehydration and transportation. When these expenses are deducted, final payments often result in royalty shares of less than one-eighth.

• Landowners are fully aware that their mineral rights are valuable, and they expect the companies to compensate them appropriately according to state law.

• Successful contracts ensure that both the buyers (the energy companies) and the sellers (the landowners) benefit under the terms of the agreement.

• Oil and gas contracts between private landowners and energy companies also are helping the nation by creating jobs, increasing energy supplies, and improving U.S. energy security.

• U.S. royalty owners deserve our gratitude and respect. They should be paid fairly for their resources.

• Because the Guaranteed Minimum Royalty Act has become muddled and needs consistent and fair enforcement.

• When we get to 10,000 signatures, I will hop in my car and drive over to Harrisburg and deliver these signatures in person to Rep. Garth Everett, the chief sponsor of HB 1684.