I regularly review the determination and valuation of production royalties, as well as royalty calculation methodology implemented (i.e. gross proceeds, market value, amount realized), especially as they apply to a particular state’s laws. Over the past four years, I have worked directly with oil and gas companies in Pennsylvania, West Virginia, and Ohio to correct underpayments of production royalties. I have recovered hundreds of thousands of dollars for my clients. It is vital to examine the precise lease and/or assignment language to determine the point-of-sale, such as royalty valuation point, hydrocarbon revenue calculation, and whether post-production costs (post-production deductions) may be deducted from gross royalties payable to owners. Sales of produced hydrocarbons to upstream company affiliates greatly compound payment problems. Many issues arise out of whether such costs are allowable pursuant to oil and gas leases/assignments of leases and state law. Although the oil- and gas-producing states have varying applications of law, each owner-operator situation can be unique.