OK, I get that BPO=Before Pay Out and APO=After Pay Out.

What does that really mean?

My division order lists

BPO = x
APO1 = x
APO2 = 0

The percentages seem right, but what's the meaning of before vs. after payout?  BPO and APO1 are the same in my case.

And what's APO1 vs. APO2?

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Mac,

Good question, I would be interested in the answer myself.

What operator sent the DO?
Someone rescue me. I am getting O & G Terminology mixed with both adult and public school lingo. I feel that OMGWTFBBQ means something else at school.
I should hope so!! LOL!!
I've got a decent start on the abbreviation dictionary for the board that Skip suggested, but it is nowhere near complete (and also not 100% accurate). I will start a discussion with the first version soon, but the ultimate quality and completeness are going to depend on help from GHSers
Good question Mac. Just let me know when the BBQ is.
So does anyone know what the Before Pay Out and After Pay Out mean?
I have seen leases that have an adjusting royalty. Something like you get 20% before payout and 25% after payout.
adjusting % is really not that uncommon with WI owners.
Baron,

I agree. It seems to me to be very common with WI owners.
Yes, but what is "payout?"
BPO = Before Payout
APO = After Payout (Value of production minus Usually Drilling & Completion Costs AND also minus Lease Operating Expenses in some cases if it is spelled out in the lease)

The reason your statement shows APO1 and APO2 is usually because the company only wants to do one spreadsheet calculation for two different types of after payout interest 1) ULMO and non-notified companies who back in after 100% payout (prob APO1) 2) Statutized companies, etc who back in after 300% of payout.

At least that's how I have seen the yearly payout statements come in from the companies we do business with.
I still don't understand what "payout" means. Is "payout" the point in time when the costs of drilling have been covered by gas sales?

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