BPO, APO1, APO2, OMGWTFBBQ?

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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Replies to This Discussion

Permalink Reply by FXEF on September 11, 2010 at 5:49
Mac,

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

What operator sent the DO?
Permalink Reply by MARG on September 11, 2010 at 12:06
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.
Permalink Reply by Skip Peel - Mineral Consultant on September 11, 2010 at 12:30
I should hope so!! LOL!!
Permalink Reply by ledlights on September 11, 2010 at 14:49
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
Permalink Reply by BirdDawg, plain ole' idiot on September 11, 2010 at 17:11
Good question Mac. Just let me know when the BBQ is.
Permalink Reply by Mac Davis on September 17, 2010 at 6:43
So does anyone know what the Before Pay Out and After Pay Out mean?
Permalink Reply by Two Dogs, Pirate on September 17, 2010 at 7:13
I have seen leases that have an adjusting royalty. Something like you get 20% before payout and 25% after payout.
Permalink Reply by The_Baron on September 17, 2010 at 7:32
adjusting % is really not that uncommon with WI owners.
Permalink Reply by Aubrey C. Sanders, Jr. on September 17, 2010 at 7:53
Baron,

I agree. It seems to me to be very common with WI owners.
Permalink Reply by Mac Davis on September 17, 2010 at 9:23
Yes, but what is "payout?"
Permalink Reply by awharris on September 17, 2010 at 11:07
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.
Permalink Reply by Mac Davis on September 18, 2010 at 4:05
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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