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Permalink Reply by Dion Warr, CPL on September 19, 2014 at 6:51

W. Hicks:

Based upon your post, you are an unleased mineral owner owning property in LA.  In Louisiana, royalty is created by the lease.  No lease, no royalty.  You would have a right to receive revenues proportionate to your ownership interest as it contributes to the unit.

Unleased mineral interest owners cannot be assessed a risk charge or penalty for not signing an Oil, Gas and Mineral Lease in Louisiana.  However, the operator of a well would have the right to recoup your proportionate share of the prescribed well costs on a well to well basis until each such well reaches payout (at which point the costs would equal the revenues generated sales of product from the well).

There is much more discussion of this in the Unleased Mineral Owners group.  Join and read up.

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Permalink Reply by William Hicks on September 19, 2014 at 7:31

Thank you.

'You would have a right to receive revenues proportionate to your ownership interest as it contributes to the unit'

How do I get these?

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Permalink Reply by Dion Warr, CPL on September 19, 2014 at 7:58

W. Hicks:

You would want to contact the operator of the well/unit in which your property has been pooled or unitized and inform them of your ownership interest in the well(s) and unit(s).  If they have done their homework, they should already have some basic information on you as an owner, and would likely show you as a UMI (unleased mineral interest) owner (some prefer UMO).  If for some reason they do not, you may have to provide them documentation as to your ownership interest (acquisition deeds, mineral transfers, etc.)

Again, I would advise that you read all about it in the UMO group to which I linked in my prior post (click on Unleased Mineral Owners in bold if you haven't already)), but you have the right as an owner to have a revenue and production statement sent to you by the operator documenting well costs (expenses) and sales proceeds (revenues) - some will even also provide a "payout" statement or spreadsheet which would amount to a summary statement of those two items, but if not, one simply subtracts stated allowed well expenses from the sales - if you're "in the red", you're still paying for the well; if you're "in the black", they should start (or already be) paying you revenues based upon your proportionate interest.

Even though your initial contact to the operator can be made by phone or email, to obtain payout statements, expenses and revenue figures, you should do so in writing [Mineral Code stipulates by letter, certified or registered mail (suggest return receipt requested)].  There are suggestions in the UMO group as to what should be in an information request or demand letter, but if you are unfamiliar, I would recommend having someone familiar with the dictates of doing same to prepare it for you (be it a landman or an mineral law attorney).  The letter is not something beyond the scope of an owner to compose - but many operators seem to "get the message" more effectively if a letter with the correct "words of art" (or the law firm letterhead) and respond in a more diligent manner.

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Permalink Reply by William Hicks on September 19, 2014 at 8:18

Thank you again for your quick reply.

I will do as you advise.

What response / results I will post within site.

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