Replies to This Discussion

Permalink Reply by Les Bamburg on August 24, 2009 at 18:19

Cheerleader, yes Linn has good hedge prices but they are in the $8-9 range thru 2011.

Permalink Reply by etx44 on August 21, 2009 at 5:55

Candi,
Your lease to Southwestern is already done, so you will need to get them what papers they need to prove your the owner of the minerals.

Southwestern is an honest company that will honor the deal you made with them. You may or may not have the best possible lease but it's done.

Southwestern & Common drill for James Lime & Hanesville in that area.

Denning is one closed down Store 7 miles W of San Augustine on Hwy 21 & New Hope is a small church 4 miles N of Denning on FM 354.

I personally see no problem with your situation and would feel positive about the future.

Permalink Reply by leo bishop on August 21, 2009 at 6:12

You will probably get a well drilled quicker with SW & Common than anyother companies and that is the main thing. get in a producing unit and start getting royalty checks.

Permalink Reply by Candi on August 21, 2009 at 6:25

Supposedly they are starting to build them now. They called and said they want them done by the end of this year. once they start drilling, how long does it take before something if anything is usually found?

Permalink Reply by leo bishop on August 21, 2009 at 6:35

about 30-45 days to drill, then you have to complete the well (fracking, etc) about another 30-45 days.Then 90-120 after that before you start getting checks.

Permalink Reply by etx44 on August 21, 2009 at 6:37

Candi, They have not started yet, you can use these links to keep up with drilling permits ect.

http://gis2.rrc.state.tx.us/public/startit.htm

http://webapps.rrc.state.tx.us/DP/initializePublicQueryAction.do

Permalink Reply by Candi on August 21, 2009 at 6:54

sorry, but i am clueless to all of this. how can i tell and what numbers do i put in?

Permalink Reply by etx44 on August 21, 2009 at 7:42

For the top link just zoom in to NW San Augustine County & recenter to move around.

For the bottom link keep it very simple pick San Augustine County & a submitted date range like 08/01/2009, 08/21/2009.

Permalink Reply by jffree1 on August 21, 2009 at 9:46

Candi, If you will look at the legal description of the tracts leased (trust me, it is there if you look) there will be a name (of the survey) followed by the letter A (for abstract) - ###. Example: William Johnson, A-355 (fictional). You need the survey name or abstract number to locate anything on the GIS map that may pertain to your lease.

Permalink Reply by Candi on August 21, 2009 at 10:42

when it says lease name is that the owner of the property or the owner of the mineral rights? i have no idea the names of the owner of the property

Permalink Reply by adubu on August 21, 2009 at 11:23

Candi---If you have already sign lease it is done and whate ever % royalty on lease is what you have. The net Mineral acres you have is now important to calculate % royalty you will receive. You can get ideal based on how many acres they paid you bonus on at signing. Ask them for copy of the "run sheet" they calculated your net acres of minerals (This is a temporary title opinion done by the landman). When a well is drilled then their Title Attorney will run complete detail Title search and give title opinion of net acres. You will then receive a division order that show the % net interest you owe in the well and this is what is then used to calculate your month royalty check and you will be ask to sign verify and return to the company before you are paid. They may have paid you more or less on bonus money but reguardless what you got in bonus is now done. The division order is most important. If you think after calculating what you inheirted the division order is less acres go see title attorney before you sign it. Royalty interest calculated by # acres you own divided by total acres in the unit X % royalty in your lease. For example you owe 100 acres in a 500 acre unit and sign lease for 20% royalty. 100/500= 0.2 X % royalty 0.2X0.2= .04 interest in well (4% of gross productions) minus taxes and anything else you agree they could deduct like compression charges, transportation pipline chares, etc. Say well made 30 mmcf gas in one month (avg 1mmcfd)and gas sold on the oil & gas co. contact at $3 the 3000 X 30 = $90,000 for month and you part 90,000 X .04 = $3,600 - ~ 300 expenses and taxes= your check ~ $3300. If you have 10 acres then about $330 month 5 acres ~ $165 for that month

Permalink Reply by adubu on August 21, 2009 at 13:12

clarify taxes they deduct is only state severence taxes you will still owe US Fed Income taxes on your 1040 tax return royalty income minus 15% depletion allowance (unless the liberal congress eliminates the depletion allowance) is added to your total taxable income.

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