Oil and gas companies refer to areas where they own a significant number of acres as fields. Stone Energy has one called the Mary field here in West Virginia. It’s up in Tyler and Wetzel counties, for the most part. It produces about 100 MMCF of gas per day. Stone Energy has decided to shut the entire field in.
The reason is that the amount of money that Stone can get for gas produced from the Mary field is so small that it isn’t worth their time; they’re practically giving the gas away. For more details, and a lot of interesting facts about oil and gas pricing and production, take a look at this article by Marcellus Drilling News.
I have over riding royalty in some of Stone energy Mary field wells.
Although the lease says free of any costs they have deducted PPcosts.
Any thoughts?
Sorry to hear that. Stone shut in their Mary field, so you’ll only be getting shut-in royalties for the time being. Regarding post-production costs, the language of the lease will control, but if it doesn’t specify the costs they are deducting then they aren’t allowed to deduct them. The first step is always to contact the company, let them know they’re not supposed to be deducting costs, and see if you can work things out amicably. It’s usually quicker and cheaper that way. If they won’t work with you, then give the office a call to set up an appointment to talk with me. 304-473-1403.