Unfortunately for me, my inherited mineral lease (without a Pugh Clause) is held by production by a previous oil well. So, it is my understanding that I’m locked into the royalty of the original lease when a new producing well comes in. But, I got my division order for my new Haynesville Shale well and it is apparent that only a 1/20th (5%) royalty was used for the decimal interest calculation – way lower than the original royalty! Can anyone explain why this would happen?
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The acreage of the new Haynesville Shale unit is taken into account along with my property acreage. The other factor left in the calculation of the decimal interest is the royalty. To derive the decimal interest proposed in my division order, a royalty of only 1/20th (5%) was used.
I called them this afternoon. I finally got in touch with a real person after several minutes of menu diving and waiting on hold. This person did not have a clue as to why the decimal interest of the DO they sent to me was so far off. He tried to pull up a spreadsheet used for the decimal interest calculation, but he could not find it. He said he would have to “kick it up to an analyst” who would call me back later.
Varice,
Some people, who leased to CHK, receive 20% of their payment from Plains and 80% from CHK under the Joint Venture agreement of 2008. I don't know if this applies to you or not. These people signed a lease with CHK, but under terms of the JV, CHK sold 20% of their holdings to Plains. So these people receive checks from two different companies each month. This might explain why you get a 5% royalty from one company (is it Plains?), and you might soon receive the other 20% royalty from CHK.
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