Royalty owners in the Marcellus and Utica Shale are often surprised to learn how many mistakes can occur in the calculation and payment of oil and gas royalties. Whether you own a few tracts or manage a large portfolio of producing assets, a properly conducted oil and gas royalty audit can be one of the most effective tools for protecting your interests and recovering lost revenue.
At Marianna Consultants, we’ve conducted royalty audits covering hundreds of wells and thousands of mineral acres—working closely with legal and financial professionals across Pennsylvania, West Virginia, and Ohio to ensure that royalty owners are paid what they’re truly owed.
What Is an Oil and Gas Royalty Audit?
An oil and gas royalty audit is a thorough review of royalty payments made by an operator, comparing those payments against:
- The terms of your lease(s)
- Your Net Revenue Interest in each well
- Public production data and operator reports
- Deduction practices and post-production costs
- Unit boundaries and well participation
The purpose of the audit is simple: to verify that you’re being paid accurately and in accordance with your lease.
Common Issues Found in Oil and Gas Royalty Audits
Mistakes in royalty payments are more common than most owners realize. Our audits routinely uncover:
🔹 Incorrect NRI Calculations
Operators may rely on outdated Division Orders, misallocate acreage, or apply the wrong ownership or royalty interest. In several cases, we have seen our clients’ Net Revenue Interest understated by more than 25%.
🔹 Improper Post-Production Costs
Even when a lease prohibits certain post-production costs (like gathering or processing), some operators still apply them. We’ve helped recover hundreds of thousands of dollars in deductions that should never have been charged to our clients.
🔹 Missing or Excluded Wells
In some cases, a producing well physically crosses your property—but isn’t listed on your royalty statements. We’ve successfully resolved cases where operators omitted wellbore tracts from a unit, resulting in substantial unpaid royalties.
🔹 Suspended Funds
Royalties can be held in suspense due to title issues or minor discrepancies. Without active oversight, these funds may sit untouched indefinitely. A royalty audit often brings these hidden balances to light.
Why Audit Rights in the Lease Matter
The ability to conduct an oil and gas royalty audit depends heavily on the language in your lease. Not all leases include audit provisions—and without one, accessing the records needed to verify payments can be challenging or impossible.
Strong audit clauses typically:
- Provide a clear right to audit operator records
- Define a reasonable audit period (2 to 4 years is typical)
- Require operators to cooperate with documentation requests
- Allow for cost recovery if the audit reveals significant underpayment
When you are negotiating new lease terms, including well-crafted audit language is essential to protecting your long-term royalty income.
Trusted Support in the Marcellus and Utica Shale
At Marianna Consultants, we specialize in working with royalty owners in the Marcellus and Utica Shale. Our process is built on precision, transparency, and results. We offer:
- Independent NRI verification using unit plats and recorded documents
- GIS mapping of wells and units to confirm participation
- Detailed reconciliation of production volumes and pricing
- Identification of deduction errors, missing wells, and suspense balances
- Clear, professional reporting that supports next steps—whether informal resolution or legal action
Many of our projects involve close collaboration with attorneys, accountants, and family office advisors, ensuring that all parties have the data they need to make informed decisions.
Recent Results
- $2.9 million recovered after identifying producing wells that were drilled through a tract which was excluded from the unit
- $115,000+ in back royalties after correcting an outdated NRI
- $80,000+ in deduction refunds for charges not allowed under the lease
- Six-figure suspense releases following resolution of ownership and title issues
These are just a few examples of how oil and gas royalty audits have helped royalty owners uncover and recover what they were owed.
Final Thoughts: Trust, But Verify
Even when operators intend to pay correctly, mistakes happen. Royalty owners who actively verify their payments—especially those with audit rights written into their leases—are in a far stronger position to protect their income and legacy.
If you or your clients have producing interests in the Marcellus or Utica Shale, it may be time to take a closer look. A well-timed royalty audit could reveal missed opportunities and secure thousands—or even millions—in underpaid royalties.
Let’s Talk
As of this writing, Marianna Consultants has recovered nearly $10 million for royalty owners through structured review and detailed oil and gas royalty audits. We work exclusively for mineral owners—not operators—and we’re ready to help you confirm your payments and protect your assets.
📞 Contact us today for a consultation