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Williston Basin Royalty Owners Association

Downstream Pricing Adjustments

  • 20 Nov 2019 12:19 PM
    Message # 8131444

    Since July 2019 our vouchers have changed.  What used to be described as "deduct codes" for gas were 1) processing, 2) gathering, and 3) compression.  These were then all expenses that came off the total gross sales (now called "sales value") for the owner.  Now these three codes have been combined into two 1)PRA (processing) and 2) Compression-gathering.  These are listed in a column labeled "Downstream Pricing Adjustments" and are NOT figured into the "sales value" or ones gross sales.

    Can someone explain this?  I've talked to the oil company and am not getting satisfactory answers so thought someone might be able to enlighten me.

  • 28 Nov 2019 8:47 AM
    Reply # 8143305 on 8131444
    Bob Skarphol (Administrator)

    During the interim following the 2017 legislative session the Oil and Gas Division of the North Dakota Industrial Commission promulgated additional rules relative to royalty owner statements. The intent was purported to be that royalty owners should be given simpler, better, and more useful information so their royalty statements could be more easily understood. The implementation date for the rules changes was intentionally delayed so the 2019 legislative session "could have input" into any suggested changes to the rules or statutes.

    The implementation date set by the NDIC was July 1, 2019.  The 2019 legislative session did not take action relative to the rules and therefore the new rules became effective on July 1, 2019

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    As your question indicates, the result was to again delay and distort by the industry actions. Your frustrations are exactly why an active outspoken royalty owners association is critical to change. Very few legislators have a familiarity with oil and gas royalty statements and do not understand why it is important to the state budget. 

    I firmly believe that is the reason for WBROA but it will take a concerted group effort. Educating and creating the awareness needed is a monumental task. I can show what is happening to my family but I do not have the ability to explain what is transpiring in all of the various environments.

    I also think it is incumbent that the Legislature become involved in designing and requiring a specific format for all royalty statements. But for that to happen, we will have to help them understand what will and will not be acceptable. The industry will obviously oppose change simply because it is would likely be counter to their attempts to mask what is actually happening. 

Williston Basin Royalty Owners Association. P.O. Box 725, Tioga, ND 58852-0725
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