landowner

How does one figure out if well costs have been recouped?

Is there a way to determine this using SONRIS reports or tools?

Royalty check stubs indicate monthly costs and sale proceeds, but can the total well cost be found if the operator is not anxious to divulge?

Tags: costs, well

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Oil & Gas ProPermalink Reply by Les Bamburg on May 11, 2011 at 2:55
VSC, the operator and other working interest owners are the only one with sufficient information to determine well investment payout status.  Production information from Sonris and other data can be used to make a rough estimate based on a set of assumptions.  

landownerPermalink Reply by Bacon on May 11, 2011 at 4:51
You can look on Sonris under the "Horizontal Tax Relief" section and see how much they are claiming the well cost them.  Providing, of course, that they have applied for the program.  Maybe that would get you in the ballpark after looking at your check stubs.  If you have an escalating royalty that goes into effect on payout, a little more pestering of the accounting department should get you a statement.  I got one from Petrohawk without much of a problem.

Oil & Gas ProPermalink Reply by HBP on May 11, 2011 at 5:07

Note that the Tax relief payout number and the number that represents payout for either an escalating royalty or for ulmo payments can be different calculations.  Use the Tax Relief number as a  good starting point though. 

Les is correct that working interest owners are really the ones with the sufficient info on this subject.  If you are a regular owner, you will probably get a "payout statement" from the operator after a request - that has about as much detail as my lawn guy's invoice.  It won't itemize what they are loading in to the point that you could really audit whether the costs are attributable to your well or not.  But that is not to say these one page payouts are intentionally deceptive - just conveniently vague.

 

A good question for the group is whether they believe a one page non-itemized payout statment satisfies La R.S. 30:103.1 where the operator has to report to the ULMO.  I would think a working interest style report would be found too burdensome on the operator (probably to burdensome on the owner as well), but is the one page statement sufficient?


Oil & Gas ProPermalink Reply by The_Baron on May 12, 2011 at 5:32
I guess it depends on how much you trust the operator

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