Although I have known from first hand experience that many mineral lessors are paid on inaccurate decimal interest calculations, 2018 revealed the problem to be much more wide spread than I had imagined. The instances where I was able to verify the mistakes generally ran from 3 to 16% and the underpayment occurred over six to ten years. A range of approximately $10,000 to $60,000. Although many royalty recipients think they know the approximate acreage ownership of their mineral interest, they have no idea whether that 8 place decimal on their Division Order or Royalty Statement accurately reflects their acreage and their lease royalty fraction. So, once again, here is the math.
The acreage you own in a drilling and production unit divided by the number of acres in the unit, times your royalty fraction.
Quarter royalty example, 10 acres in a 640 acre unit, 10/640 = 0.015625 X 0.25 = 0.00390625.
Please be aware that the acreage the unit operator credits you for may vary from what you think you own. The only way to know if you are being paid correctly is to know the number of unit acres used to calculate your royalty decimal. Your credited acreage in a unit appears in only one document, the unit survey plat submitted to the Department of Natural Resources, Office of Conservation. I will attach an example at the end of this discussion introduction.
For over a year and a half I have been lobbying the DNR/OOC and the Governor's office to enforce the state policy that a unit operator submit a unit survey plat within 90 days of first unit production. When I started that effort there were, by my count, roughly 850 delinquent unit survey plats. Although the OOC has been issuing compliance letters to operators in violation of the policy, there are still about 600 delinquent surveys. Obviously this will take some time to correct. If you are willing to wait to find out if you have been paid correctly, I think this issue will largely be settled in about four years.
Keep in mind that there is a limitation on how far back a royalty recipient may collect underpayment. Unless there are some extenuating circumstances, only the last three years may be recouped should you discover an underpayment.
Here is how to check to see if your unit survey plat is entered in the SONRIS database. Go to SONRIS Data Access and get the four digit field code and unit designation name. For example, Caspiana Field is 2360 and the unit designation would be HA RA SUA. Unit designations can be letters or numbers and in some fields Haynesville Shale units may be JUR instead of HA. Now go to the SONRIS Document Access and scroll down to Survey Plats in the left hand search column. Enter the field code and search to see which Haynesville unit surveys are listed.
If yours is there, make a copy and do the math. If your survey is not listed, then you have a choice. Wait until some indeterminable time in the future for it to be included, or contact DNR/OOC and request that they follow up with your unit operator in order to bring them into compliance. If you would like to be proactive, you should contact Mr. Gavin Broussard, Manager, Inspection & Enforcement at the Office of Conservation. I suggest that you be respectful as this issue is not the fault of Mr. Broussard but that of numerous past heads of the Department and the Office of Conservation and he is the only person that can help you address your right to know the details of your royalty revenue. Please keep in mind that the squeaky wheel gets the grease. Be polite, be persistent and keep a record of your communication. Send registered letters and keep copies of email exchanges. The only way this issue gets solved is through the lobby efforts of numerous Louisiana mineral lessors. If you choose to pursue a copy of your unit plat through the Office of Conservation, please post your comments in this discussion.
Mr. Gavin Broussard
Office of Conservation
Manager, Inspection & Enforcement
Mr. Broussard's contact information: 225-342-5513, email@example.com
P.O. Box 94275
Baton Rouge, Louisiana 70804
Example Survey Plat.
For members who may not wish to post regarding their efforts to acquire a unit survey here in an open discussion thread, please consider contacting me on my personal page. Making the unit surveys available in the public record is an important step in empowering Louisiana mineral lessors.
CULs are making this a bit more complex in LA, but still doable. One still needs to obtain the as-drilled plat to derive the production allocation on a per-unit basis. Per the rules, this ratio is defined as the footage of productive unit lateral in the given unit divided by the total productive lateral of the well in question (not lateral length, productive length). Thus, you must multiply the total production by this ratio to obtain the allocated production attributable to the owner in that unit.
The ratio changes on a well-to-well basis, as does the necessity to factor for the production from each well (which as most seasoned members here know is not available on SONRIS - only combined LUW production is available).
Amended well permits are filed to evidence the as-drilled numbers - in the interim, the projected numbers will "get you close".
Dion, good point. What I am suggesting to members is to use the unit survey to check their decimal interest as it appears on their Division Order or royalty statements for the original unit well before the addition of any later Cross Unit Later (HC) well(s). That decimal interest would be the starting point for anyone who wanted to check a new decimal for HC wells. The "Perf Letter" for each added HC well will, as you point out, provide the linear feet in each section/unit and a percentage of the total perforated lateral length that is reported as unit production. That information can be used to confirm the new decimal for new HC wells.
Donna, I don't see it on my personal page. I am afraid you will have to resend.