After five months of lobbying the state, the Department of Natural Resources/Office of Conservation has placed operators on notice that they are in violation of a regulation requiring that a unit survey be submitted to the OOC no later than 90 days after a unit begins production. The unit surveys are meant to be a public record so that mineral lessors, unleased mineral owners and the state can confirm that their interests have been accurately surveyed and used to create an accurate Division Order that will be used to properly pay royalty interests and unleased mineral interests.
As many of you will note, the vast majority of Haynesville Shale drilling & production units are not marginally past due, they are years past due. In the process of lobbying the OOC to address this problem, I researched all surveys entered in the database by field. I compared the producing wells in each field with the surveys in the database for that field. By my count, at the time I performed the research, there were approximately 850 delinquent unit surveys.
I am copying the notice sent to operators requiring them to supply their missing surveys by January 20, 2018. As expected, by myself and the OOC staff, only a few surveys were submitted by that date. The operators noticed have been in touch with the OOC to provide timelines for submitting their missing surveys. The OOC will, as always, be accommodating up to a point with operators not in compliance. I have intentionally waited to post this discussion to provide some breathing room for the OOC staff as this is not a small undertaking. I believe that I have waited long enough and I now post this information for the benefit of the members. I would like to thank my attorneys, Randy Davidson and Davis Powell, for joining me in submitting letters to the DNR/OOC to point out that the missing surveys were not only a violation of state regulations but an impediment to owners of mineral rights in attempting to confirm that they were being paid properly. I am redacting the identities of the sender and receiver of this particular notice copy as I think that is the correct and respectful means to include the notice in this discussion. I am not redacting the phone number and email address as I think that mineral owners should speak up for their rights. I encourage members who are missing surveys to contact the OOC and make a specific request for access to the state approved survey of their drilling unit.
Sent: Wednesday, December 20, 2017 8:54 AM
To: ________________Cc: ________________
Subject: Delinquent Haynesville Shale Unit Survey Plats
Based on Office of Conservation records, it has been determined that numerous Haynesville Shale unit survey plats in various fields have not been submitted in accordance with the requirements of LAC 43:XIX.43.4103.F.2. The regulation requires each producing unit be surveyed and the survey plat be submitted to this Office within ninety (90) days from the date production commences. Please refer to LAC 43:XIX.43.4103 for more information.
Please provide a list of your company’s delinquent (more than 90 days since production commenced) Haynesville Shale unit survey plats by field in the attached Excel spreadsheet no later than January 20, 2018. Failure to comply with this request may result in the issuance of a compliance order and other regulatory sanctions as deemed necessary. If additional time will be required, please submit such request prior to the date specified above.
If you have already submitted a survey plat, or if you have any questions, please contact the Inspection and Enforcement section of the Office of Conservation at (225) 342-5540 or E&I@la.gov referencing this notice.
Inspection and Enforcement
How to search for your unit survey. Links you will need, Data Access http://sonris.com/dataaccess.asp
and Document Access http://ucmwww.dnr.state.la.us/ucmsearch/Doctypes.aspx
What you will need: The unit designation for your well(s) is the first portion of the well name. For example if your wells is, HA RA SUA;S Ridge 22-15-15H, then your unit is HA RA SUA. Since there is a HA RA SUA in every field with Haynesville Shale production, you must also know the field name and 4 digit code number. In this case the field is Caspiana and the field code is 2360 and can be found in the first line of the SONRIS Data Access Well File, use the link above.
Next go to the Document Access portion of the database, scroll down the search options in the list to: Survey Plats. Click on that search and then enter the 4 digit field code. This will get you a list of all survey plats for the Caspiana Field. If your unit, HA RA SUA, is included click on the red box and make yourself a copy. If not, your unit does not have a survey on file and is delinquent.
What is important about having a copy of your unit survey? The unit survey allows you to check to see if you agree with the size in acres that the operator has calculated for your tract or tracts. The survey also provides the number of acres in the unit. Few units are exactly 640 acres and the exact size is important to calculating your decimal interest.
The decimal interest listed on your monthly royalty statement should be the number of acres that you own, down to the fraction, divided by the exact number of acres in the unit, multiplied by your royalty fraction. Since the unit acres are the same for all mineral interests force pooled in the unit and your royalty fraction is stated in your lease agreement, the only variable that is in doubt is the size of your tract or tracts. You should be aware of the fact that it is common that the documents evidencing the sale of land or the passing down of the land through heirship simply use the legal description copied from prior conveyance documents. It is quite possible that there are errors in those prior documents that have been maintained down through the succession of ownership especially if the description originates in an old document. Therefore small discrepancies in the number of acres are common. If the discrepancy is significant, that is a red flag. The question then becomes, did the unit operator perform a proper (accurate) survey or is the discrepancy associated with an inaccurate legal description? A significant difference can entail quite large sums of money.
Yes. First of all the problem of missing unit surveys is not limited to the Haynesville Shale. That's where I started because I was performing some detailed research that required the surveys across much of the Bethany-Longstreet Field. After completing my expanded research of delinquent surveys for all the Haynesville Shale fields, I added those in the Terryville, Hico-Knowles and Ruston fields.
If the 17900 TUSC RA SUL unit has been in production beyond 90 days and there is no unit survey in the SONRIS database, yes, contact the OOC. I would suggest sending an email with the well name including the unit designation, serial number, field name, field ID code, the date of first production from the unit well and the name of the well operator. Give a week for an email reply acknowledging receipt of your request. If you do not get a reply, follow up with a phone call.
John, if you and other mineral lessors, whether GHS members or not, will place requests for their unit surveys, it will have an impact with the OOC. The squeaky wheel gets the grease. Pass the word.
Thank you Skip, most helpful
You're welcome, John. For those who have an interest in a drilling unit that is not in production at this time but was previously for any length of time, that operator owes the state a unit survey plat also.
Something has happened lately to the Conservation Dept. of the DNR which rendered it less capable. Like it got rid of a bunch of old hands and the nubes are running it now.
Bob, the budget has been cut resulting in staff layoffs a number of times over the last ten years. You are correct that many of the long time experienced staffers are gone. So in a number of instances not only is the staff dedicated to certain tasks less, their experience level is less also. A few years ago there were 4 staff in the compliance department. Now there are 2 and the lead has less than 2 years experience.
This is something that affects my work and certainly is a potential detriment to mineral owners but we are few in number with little political clout. Until these draconian budget cuts start to negatively affect the average Louisianian, they will continue to elect officials that think they can cut their way to prosperity. We are stuck in an age of partisan delusion that is killing this state.
To those who have contacted me off site to share your experiences, thank you. To the members currently receiving royalty income, I have a request. Please check your unit survey to see if the acreage the operator credits you with is correct. Also, use your tract size and the unit size in acres to double check the royalty decimal interest listed on your royalty statement. It appears that there may be wide spread and serious inaccuracies in royalty payment calculations.
Did you see one for lcv ra su 54 field 9203 or id r3800 parish jackson? Maybe im blind, but I have yet to see a plot map or pool map etc for the well producing and we are suspecting highly wrong decimal being paid. Thank you for all your hard work and help. Range has yet to get back with us.
I just checked, James. No, there is no unit plat in the database for LCV RA SU54. Range had 90 days to turn in an acceptable unit plat to the state from the completion date of 12/4/16. You should contact the OOC and inform them of the delinquency and request that they follow up. Let me know what they say.
We emailed yesterday so hopefully we can find out something soon.
Thank you for following up. Please let us know when you receive a response. And please pass the word to any others who may find themselves in a producing unit with no unit survey in the public record.