Services Overview

Royalty Buyout The Bugle Group buys out royalty / mineral rights holders to improve your buttom line
Expert Witness The Bugle Group provides the straight facts to the court

Royalty Deductions

SAVE 20% ON YOUR ROYALTY PAYMENTS!
THE NUMBERS:
 
$34 Million net savings to clients
 
0 lawsuits
 
26,000 royalty accounts reduced
 
255 complaints resolved
 
20 years experience
Slash the amount you pay out in royalty with DEDUCTIONS FOR POST-PRODUCTION EXPENSES.
Oil & Gas Leases usually provide for lessors (landowners) to share certain costs such as property taxes, severance taxes, power (in some cases), treating and transportation. Court cases in many states also establish rights for producers to withhold landowner’s share of these AND OTHER costs from the royalty stream. Let The Bugle Group give you a free estimate of how much you can save.
CORE IDEA: Some types of costs from running an oil field should be paid jointly by Lessee (oil company) and Lessor (landowner).
I.
Reasoning--Why should Lessors (landowners) pay some costs? Isn’t that the usual job of the Lessee (oil company)?
 
NO, THE COURTS SAY SOME COSTS SHOULD BE SHARED BY LESSORS (LANDOWNERS).
A.
Courts in past decisions broke down oil producing activities into 4 chunks:
i.
Exploring,
ii.
Producing,
iii.
Treating, and
iv.
Marketing.
B.
California courts went on to say that costs from the first 2 chunks have to be paid only by the Lessee (oil company), but that the costs from the other 2 chunks have to be shared between the Lessee (oil company) and the Lessor (landowner), IF there was certain language in the lease.
TEST:
IF the lease says the Lessor (landowner) may take their royalty share (the amount shown in the lease, often 1/6 th, which goes to the landowner) IN KIND, that is, if the Lessor (landowner) may bring a truck to the well and fill the truck with their share of oil and gas and drive away;
THEN
the Lessor (landowner) is obliged to pay its share of the costs for everything the Lessee (oil company) does to the oil and gas downstream of the well to make the oil and gas clean enough to sell.
C.
The Courts also said 2 other kinds of costs, being:
i.
taxes and other government fees, and
ii.
electricity may sometimes be shared between Lessees (oil companies) and Lessors (landowners).
II.
What costs may legally be shared?
A.
3 Sources of Answers--
i.
Lease language,
ii.
Court rulings, and
iii.
Field circumstances.
B.
Lease Language.
i.
Almost all leases say Lessors (landowners) must pay the royalty share of property tax.
ii.
Most leases say Lessors (landowners) must pay the royalty share of other “taxes” such as licenses, governmental fees and the like.
iii.
Many leases say Lessors (landowners) must pay the royalty share of dehydration of oil, oil treating, gas compression, gas treating, and transportation.
iv.
Many leases say Lessors (landowners) must pay the royalty share of alternate fuel (electricity) if they cannot use lease gas as fuel.
C.
Court Rulings.
i.
IF the lease is SILENT as to sharing costs downstream of the well, but the lease says the Lessor (lndowner) may take its royalty share of oil and gas in kind, THEN the Lessee (oil company) MAY CHARGE the Lessor (landowner) for its share of costs for operations downstream from the well (“Western Gulf v. Title Insurance”).
ii.
Costs downstream from the well include dehydration of oil, oil treating, gas compression, gas treating, and transportation and other similar costs. (“Alamitos Land v. Shell Oil”, “Vedder Petroleum v. Lambert Lands, 1942”, Axis Petroleum v. Taylor”, “Atlantic Richfield v. State of California”, “Whepley Oil v. Associated Oil”).
iii.
Overhead may be charged on the items listed above (“Vedder Petroleum v. Lambert Lands, 1946”).
iv.
Electricity may be charged if the Lessee (oil company) is banned from using lease gas as fuel for internal combustion engines (“Walker v. Pacific Energy”)
v.
Depreciation of equipment used for costs from operations downstream from the well may be charged(“Myers v. The Texas Co.”).
vi.
Taxes and fees other than property tax may be charged (“Crocker Bank v. McFarland Energy”).
D.
Field Circumstances.
i.
Proportion of time spent by field workers on operations downstream from the well.
ii.
Water treating and disposal (not water injection for waterflood).
iii.
Diluent (as to the proportion used to facilitate operations downstream of the well).
E.
So 3 Kinds of Costs Should Be Shared.
i.
Costs downstream from the wellhead and other costs arising from those costs.
ii.
Property taxes and all other governmental fees.
iii.
Electricity in certain cases.
III.
Brown Provides Services.
A.
Builds a customized software matrix for each lease, based on:
i.
the language in that lease,
ii.
the court rulings as they apply to that lease, and
iii.
the field circumstances for that lease; so that the Lessee (oil company) can hold back (deduct) from Lessors (landowners) royalty payments their fair share of deductible costs.
B.
Defends Lessee (oil company) from complaints by Lessors (landowners) with the following:
i.
$1 Million Bond with Lloyd’s of London,
ii.
Retained attorney to help respond to complaints.
iii.
Bugle Group INDEMNIFIES his clients. Bugle Group responds to Lessor (landowner) complaints.
NOTE:
After 20 years of practice in royalty deductions, with over 26,000 individual royalty accounts reduced, and over $34 million in net savings to clients, Bugle Group has had ZERO lawsuits! No lawsuits filed. No lawsuits prosecuted. No lawsuits lost. So this service is really safe for Bugle Group clients!
C.
Calculates one number for each lease monthly that its clients insert into their accounting software. The software takes the deduction amount “off the top” so the actual royalty is paid after those deductible amounts are held back.
D.
References.
Ask for written and verbal references from clients.
IV.
How Much Money Does the Client Save?
Savings depend on what the leases say, on how much cleaning the oil requires, and other such variables, but Brown has generally saved anywhere from 10% to 20% of the total royalty bill for clients. So if a company is sending out $100,000 per month in royalty now, it might save from $10,000 to $20,000 per month.
ANALOG: Bugle Group is like a tax attorney who find you more deductions on your return so you pay less taxes. The tax attorney also defends you from audits.
Contact the Bugle Group today to get started!

Royalty Buyout

Besides lowering royalties to pay, The Bugle Group has also bought out hundreds of mineral/royalty owners, which further improved the bottom line for producers.
Contact the Bugle Group today to find out if this service is right for your operation!

More Information

Contact the Bugle Group today for more information on our services!