Your royalty check dropped, the deductions line grew, or the statement simply makes no sense. A gas royalty attorney in Pennsylvania can compare what you are paid with what your lease and the law require. Kostrub Law Firm, PLLC has worked with owners from Cecil Township since 2006. Royalty review is part of our complete oil and gas law services.
What happens after you call: we ask for your lease and recent statements, review them, and meet to explain what we found.
What a royalty dispute is
A royalty is your share of the value of oil and gas produced from your land, paid without sharing drilling costs. A royalty dispute arises when you believe the operator is paying less than the lease allows. Common causes include:
- Post-production deductions. These are costs to gather, compress, process, and transport gas after it leaves the well.
- Low prices. The operator may value gas at a low price, such as a sale to its own affiliate.
- Wrong decimal interest. Your share of the unit may be calculated incorrectly.
- Missing volumes. Gas may be used or lost before it is counted.
- Late or held payments. Payments may be held in suspense without a clear reason.
Pennsylvania law that matters
- Minimum royalty. 58 P.S. § 33 requires at least a one-eighth (12.5%) royalty.
- The net-back method. In Kilmer v. Elexco Land Services, 990 A.2d 1147 (Pa. 2010), the Pennsylvania Supreme Court held that the one-eighth minimum may be calculated at the wellhead. That allows certain post-production deductions in PA unless the lease says otherwise. Your lease language is what limits them.
- Royalty statements. Act 66 of 2013, 58 P.S. §§ 35.1–35.2, amended by Act 153 of 2022, requires operators to give royalty owners statements with the well, production month, volumes, price, deductions, and your decimal interest.
- Time limits. Most contract claims in Pennsylvania must be filed within four years under 42 Pa.C.S. § 5525. When the clock starts can be disputed, so do not wait.
- Class settlements. Some owners in this region are part of class action settlements that may affect individual claims. We check for this early.
Lease language that decides most disputes
- “At the well” or “at the wellhead” often allows deductions.
- “Free of all costs” or “no deductions” language can limit them, depending on the wording.
- “Market enhancement” clauses often allow some costs and not others.
- An audit clause may give you the right to inspect the operator’s records.
Common situations in Washington and Allegheny counties
- Deductions that equal a large share of the gross value on the statement
- A royalty rate on the statement lower than the rate in the lease
- A royalty underpayment after the operator changed gas buyers or pipelines
- Statements that leave out required details
- Payments that stopped after a well was sold to a new operator
- Heirs who inherited a royalty interest and cannot tell if they are paid correctly
Our blog lists warning signs that royalties are underpaid you can check on your own.
What happens if you don’t act
Underpayments repeat on every check. Over the life of a well, a small error can add up to a large loss. Pennsylvania’s time limits mean older underpayments may no longer be recoverable if you wait too long. Some leases also require written notice before you can sue, and missing that step can delay or weaken a claim.
Think your royalties are short? Call (304) 982-1586 · Request a consultation · After you call, we tell you which statements to gather and set a time to review them.
How we handle it, step by step
- Collect the papers. Lease, amendments, division orders, and as many statements as you have.
- Read the royalty clause. We decide what deductions the lease allows and how price must be set.
- Check your decimal. We confirm your share against your title and the unit plat. See how we verify a division order.
- Review the statements. We look at volumes, prices, deductions, and patterns over time.
- Ask the operator. We send a written inquiry or audit request where the lease or law allows.
- Resolve or pursue. We negotiate with the operator. If that fails, we discuss filing a claim, the costs, and the risks before you decide.
What to bring to your first meeting
- Your oil and gas lease and any amendments or addenda
- Royalty statements or check stubs, as far back as you have them
- Division orders and any letters from the operator
- Your deed or estate papers showing your interest
- Notes on when payments changed
- Any class action notices you received
Fees
We explain fees before work starts. A statement review is scoped differently from a lawsuit, and we tell you which fits your situation before you commit.
Who handles this
Daniel B. Kostrub handles royalty questions for the firm, along with lease review, title opinions, and division orders. J.D., 2002–2005. Learn more about your royalty attorney, Dan Kostrub, or stop by our Cecil Township office. If you have not yet signed a lease, our help negotiating gas lease terms can prevent many of these problems.
Frequently asked questions
Can gas companies deduct post-production costs in Pennsylvania?
Often, yes, depending on the lease. Under Kilmer v. Elexco, the one-eighth minimum royalty may be calculated at the wellhead, which allows certain post-production deductions. Whether your operator can take them, and which ones, depends on your lease wording. Some leases limit or bar deductions.
How do I know if my royalties are underpaid?
Compare your statements with your lease. Check the royalty rate, your decimal interest, the price per unit, and the deductions. Watch for sudden drops, deductions that keep rising, or prices well below area market levels. A review of several months of statements usually shows patterns a single check does not.
What must a Pennsylvania royalty statement show?
Under Act 66 of 2013, as amended by Act 153 of 2022, statements must include details such as the well, production month, volumes, price, deductions, and your decimal interest. If your statements leave out required information, that can be raised with the operator.
How long do I have to bring a royalty claim in Pennsylvania?
Most contract claims must be filed within four years under 42 Pa.C.S. § 5525. When the period starts can depend on the facts and the lease. Some leases also require written notice to the operator first. Talk with an attorney promptly so older payments are not lost.
Do I need a royalty attorney, or can I contact the company myself?
You can contact the company yourself, and sometimes that resolves a simple error. A royalty attorney helps when the issue involves lease interpretation, deductions, affiliate pricing, or a large amount over time. An attorney can also check whether a class settlement affects your rights.
Was I part of a royalty class action?
Some Pennsylvania owners received notices of class action settlements involving royalty deductions. Being in a class can limit or shape your individual claims. Bring any notices you received so we can review how they apply to your lease.
Get your royalties reviewed
Call (304) 982-1586 or request a royalty review. After you call, we tell you which statements to gather, review your lease and payments, and explain your options in plain English.
This page is general information, not legal advice. Reading it does not create an attorney-client relationship.