Royalty Payments

It is my understanding that the first royalty payment is due 180 days after first date of sales and that the company of which you have signed would be subject to interest and penalties if this date is not met. Any input would be appreciated. Thank you.

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Permalink Reply by j garrett on November 5, 2011 at 15:45
The "interest" doesn't amount to anything.  The law needs to put some teeth into that and make the penalty substantial. It can take over a year for the first check on a well. Expect 7-9 months.
Permalink Reply by little ole 1st grade teacher on November 6, 2011 at 3:58

It is written that way on paper; however, not true.   We actually had to push for our royalty and it was paid after many requests for payment to us. .....   it was almost like it was "hush" money or please "Shut up" now money.... and by the way, not after 180 days .... but after a much longer time.

GOOD LUCK!!!!   Who are you leased with?

 

Permalink Reply by penelope kothmann on November 6, 2011 at 5:45
Little ole, I am leased with Petrohawk. I so hope this royalty payment is not going to be a problem we are talking about a substantial amount of money. It is not due until February but I have already sent my demand letter for Division Orders. My understanding is that they have 30 days to respond. Thank you for your input and have a nice day.
Permalink Reply by The_Baron on November 7, 2011 at 7:56

their response may be as simple that "we are working diligently on the title opinion and division order".

 

The title depts. can and do run behind, but you never know you may shake them loose.

Permalink Reply by penelope kothmann on November 7, 2011 at 10:13

Baron, Got letter today asking how I wanted my revenue directed. Maybe my diligence has paid off. I intend to peck until I have my revenue. You know the saying the wheel that gets the most grease moves.

 

Permalink Reply by The_Baron on November 8, 2011 at 5:11

Absolutly.

 

Be sure they have your SSN/TIn # so they won't take out witholdings.

Permalink Reply by penelope kothmann on November 8, 2011 at 9:14
Baron could you elaborate on the witholding statement.  Am I understanding that they would take out taxes and then I would be taxed again. ??? Thank you Baron
Permalink Reply by Ezra on November 8, 2011 at 5:41
pk, what was first sale date, in other words how long did it take to get a response?
Have you received Division Orders? I have a Petrohawk well that has been producing since April 2011 and have not heard from PHK.
Permalink Reply by The_Baron on November 8, 2011 at 6:13

read her post...

 

she sent demand letter for division order

Permalink Reply by getoverit on November 8, 2011 at 10:45
Where can I get a copy of a demand letter?  Is there a sample copy I can find somewhere, or do I have to consult an attorney?  We are also leased with Petrohawk and our well has been producing since 12/2010, and we're talking about 1,259,943 MCF worth of gas production.  We were told both in June and September that they were still waiting for title opinions for this unit.  Apparently, we need to send a demand letter as well.
Permalink Reply by penelope kothmann on November 8, 2011 at 13:56

getoverit,

* reference your lease # *well name * well serial # * well #

The letter should state a demand to Petrohawk to provide you with Division Orders for the referenced well and for all royalties due from the date of first sales on that well. Enclose a copy of your lease and send certified mail. From the MCF you listed it sounds like you are due quite a bit of revenue. You can also check clerk of court offices in Bossier Parish about your title. The # is 318-965-2336 if this is not the right office I am sure they can direct you. Keep us posted.

 

 

Permalink Reply by HBP on November 9, 2011 at 3:39

 you may mention in your letter that your demand is in accordance with and cite article 137, et seq. of the LA Mineral Code, in case you need the written notice to qualify under that article later on (hopefully not).

 

The lessee may respond w/in 30days of receipt to your demand and again give their title opinion explanation, but more than likely for a well that has been on that long they will try to go ahead and put you on and estimated D.O. and get a check out if there are no apparent title issues, or if you have production with that Lessee in other areas that could absorb an estimated payment discrepancy.

 

(Also, a good  reasonably priced attorney that deals with operators on royalty issues never hurts.)

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