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Adam Wilmoth: Low natural gas prices hurt royalty owners

Low natural gas prices have led energy companies throughout the country to move away from natural gas and toward oil instead. The change has been especially difficult to the state's royalty owners, who do not have the ability to change to the hip fossil fuel.
by Adam Wilmoth Published: September 7, 2012

The natural gas price collapse over the past year has caused waves throughout the energy sector.

Producers throughout the country are moving as quickly as possible out of the natural gas business, instead favoring natural gas liquids and especially oil. In the process, they are transforming the industry's infrastructure and geography.

Royalty owners represent one group most directly affected by the trend.

Producers can move from natural gas-rich areas to oil-rich producing areas.

Service companies can service oil wells as easily as natural gas wells.

Manufacturing companies can make oil equipment instead of natural gas equipment.

But royalty owners cannot change out the rocks buried deep below the surface of their land.

Moore resident Ann Weathers and her family have been receiving royalty revenue for 45 years from a natural gas well on her family's land in Major County.

The well has changed operators several times over the past five decades, but the gas and the royalty checks have kept flowing.

Over the past year, however, the payout has become much less frequent.

Weathers and her four brothers each receive a check when their individual balances reach at least $100.

That used to happen almost monthly. Then it slipped to every two or three months.

In July, Weathers received a check for just more than $76, accounting for the first six months of the year.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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