Replies to This Discussion

Permalink Reply by a on November 14, 2012 at 3:50

I believe the ERI stands for Exempt Royalty Interest.  It states that on my check stub, however I do not know what it means either.  Any help would be appreciated.  Thanks 

• ▶ Reply

Permalink Reply by HBP on November 14, 2012 at 5:13

ERI is "Estimated Royalty Interest".

If both division orders are for the same unit, then look at the dates to see the most recent.  If they are the same date, you could contact them to clarify what your RI (or ERI) should be before payments start.  Since it is not necessary to sign D.O.'s in LA, you may just want to confirm the RI info with Petrohawk and make sure they have your Tax ID or SSN and correct address - then confirm the same again once the initial payments arrive.

• ▶ Reply

Permalink Reply by a on November 14, 2012 at 5:15

It clearly states on my check stub "ERI   Exempt Royalty Interest" under the interest types.

• ▶ Reply

Permalink Reply by HBP on November 14, 2012 at 6:38

Then you would be right according to that stub. Can't argue there.  Who is the Payor?

In general I have always been told by Div. Order Analyst and in-house landmen that ERI was Estimated.  And in those cases it was "estimated"  due to some preliminary work that had not been completed to confirm it - and then eventually it changed to just an "RI" later on. 

• ▶ Reply

Permalink Reply by Tar Heel on November 14, 2012 at 7:49

The "excess" was something that I saw on another company's stub, so perhaps ERI does not have a universal meaning.  I think your "estimated" might be the meaning in this case as the RI had a decimal that we had said was wrong and the ERI had the decimal that we said was the correct one.  Thanks.

• ▶ Reply

Permalink Reply by GoshDarn on November 14, 2012 at 8:01

TH:

HBP knows his stuff.

Also, since I'm kinda lucky to have royalty income from HK (along with several other operators), I can say . . .  when a landowner compares NG pricing between operators, HK can somehow -- sometimes -- get a better wellhead price (i.e., maybe because it's a higher "cash" hub price), even though the total dang deductions on the monthly statements have zoomed up to over 30% on the gathering, transp., processing, etc.

Now that's a real "cheating" tax, if you ask me.  Used to be, before the Haynesville came a callin', used to be that the truly "reasonable" and honest operators were only hitting us for around 6% on their deduct vigs.

Yep, few are aware of the history lesson in this regard, but some of us with old hbp-ed vertical wells (royalty owners) were doing much better each month before the Haynesville gamed the deductions out of whack.

GD

 

• ▶ Reply

Permalink Reply by a on November 14, 2012 at 8:45

Petrohawk

• ▶ Reply

Permalink Reply by Spring Branch,mineral owner on November 14, 2012 at 9:01

I suspect that Exempt Royalty Interest means that Petrohawk is recognizing that you have a cost-free royalty provision in your lease.  As simple as that.

• ▶ Reply

Permalink Reply by Tar Heel on November 15, 2012 at 5:40

That makes sense, too, as we do have a cost-free provision. However, that wouldn't explain the separate RI division order. Would it?

 

• ▶ Reply