Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 6, 2012 at 8:34

Publicly traded energy companies will often state average well costs for a particular play through news releases and presentations. You won't find out the cost of a particular well unless you are a Working Interest or can some way get a copy of AFEs (Authorization For Expenditure),  They are not available in the public record.

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Permalink Reply by LN on June 6, 2012 at 10:39

How will I know if the o&g company is charging me fair and square for the cost of the my percentage for the cost of the well?  Will my attorney be able to get a copy of the AFEs?  And if not, who can?

 

Thanks.

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Permalink Reply by Skip Peel - Mineral Consultant on June 6, 2012 at 10:52

You didn't state that you were a UMI (Unleased Mineral Interest).  Is that the case?

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Permalink Reply by LN on June 6, 2012 at 11:20

Yes.

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Permalink Reply by Skip Peel - Mineral Consultant on June 6, 2012 at 11:27

From Caliente's UMI Basics:

C. Reports shall be sent by certified mail to each owner of an unleased oil or gas interest who has requested such reports in writing, by certified mail addressed to the operator or producer. The written request shall contain the unleased interest owner's name and address. Initial reports shall be sent no later than ninety calendar days after the completion of the well. The operator or producer shall begin sending quarterly reports within ninety calendar days after receiving the written request,
whichever is later, and shall continue sending quarterly reports until cessation of
production.

D. Notwithstanding any other provision of this Section to the contrary, at the time a
report is due pursuant to this Section, if the share of the total costs of drilling,
completing, and equipping the unit well and all other unit costs allocable to an
owner of an unleased interest is less than one thousand dollars, no report shall be
required. However, during January of the next calendar year, the operator or
producer shall report such costs to the owner.

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