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Permalink Reply by Skip Peel - Mineral Consultant on June 11, 2024 at 2:44

Yes.  Many small oil operators of old wells that were producing and holding old "all depth" leases in force when the Haynesville Shale play started were able to assign the deep rights to the shale operators.  Chances are the early Haynesville Shale wells went into production long before 2019.

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Permalink Reply by William Arnold on June 11, 2024 at 4:15

Thanks. Some of these Haynesville wells started production in 2019 and we are getting paid through the leases we signed in 2017.

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Permalink Reply by Skip Peel - Mineral Consultant on June 11, 2024 at 7:36

That override is the difference between the royalty in the old lease and the royalty that the small oil operator received for the assignment.  Depending on the date of the old lease, if it was a one eighth royalty and the operator got the difference, you would both be getting paid on one eighth.  You got the original one eighth and the oil operator got an eighth on top of that for a quarter royalty.  The usual difference is that an override is cost free while you get dinged for post production deductions.

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