Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on September 1, 2021 at 4:29

UMIs do not receive AFEs, only Working Interests (WI) receive them.  I've never known a UMI to offer to participate in a well by paying their proportional share of drilling and completing a well but that might be possible with some operators.  The length of a lateral has to do with the cost to produce an mcf for the operator but has little to no significance for a royalty interest (RI) or a UMI.  The RI and UMI benefit from the more intensive hydraulic fracture stimulation that has become a standard part of completion operations for all horizontal Haynesville/Bossier wells regardless of lateral length.  RI and UMI get paid based on the sales price of the gas, not on how much it cost the operator to produce an mcf.

For the headaches involved with going "non-consent" including the likelihood of getting pencil whipped on expenses, I strongly suggest that mineral owners lease their minerals.

• ▶ Reply