Royalty Check- checking it against Sonris

We just received a first royalty check and it's really a startling underestimate of the royalty calculators listed online.  I'm trying to check numbers and just don't have a clue.  Can anyone help me determine the production of Well # 241852 (ID 7870)?  We own 40 acres and 3/16 royalty out of a 650 unit. 

 

Thanks for any help!!

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landownerPermalink Reply by mskillerbee on March 26, 2011 at 7:55
I can only empathize with your frustration!    I hope someone does explain this so we all can learn, save and use the info in the future.  I have heard from a few people that the royalty checks are disappointing to say the least, unless you own large amounts of land. I hope you get this figured out.

landownerPermalink Reply by RONNY on March 26, 2011 at 8:16
I'm not sure what kind of check you received but I don't think it's a royalty check.  The well serial number you gave is not paying royalties yet.  Be sure and read all the fine print on the check you received before you cash it.  It may be a bogus check designed to transfer your mineral rights to someone else once it is cashed.  Ask someone you trust to look at the check before you cash it.  With 40 acres you will receive some nice royalties, be patient.  Good Luck.
Permalink Reply by CBT on March 26, 2011 at 10:42
Thanks Ronny.  It's a royalty check and is legitimate.  I called contact numbers and they all are directed to the right companies/places, but it's Saturday, so no one's answering phones.  One check is from Encana and we also received a detailed letter by Shell breaking down the numbers for the other half that's coming.  Problem is, both letters don't reveal range of date for first production and I can't check the quantity/value of the well vs. Sonris data.   We're all a little "shale" shocked as to the amount of the check but can't complain...it's all an unexpedted bonus in the long run!

landownerPermalink Reply by Henry on March 26, 2011 at 8:23

CBT,

If you share the numbers with us, someone can walk you through the calculation that led to your disappointing payment.  It could be that your first check was for part of a month.  That's one reason it might be low.  Sonris does not show any production yet, so we need your numbers from your statement, if we are going to help you.

Permalink Reply by CBT on March 26, 2011 at 11:13

Without being able to check the data (date range and production numbers) against Sonris, I'm not entirely comfortable sharing specific numbers, but the overall royalty check is about 1% of the well value. 


landownerPermalink Reply by Henry on March 26, 2011 at 12:58

CBT,

If you have 40 acres in a 650 acre section, and a 3/16 royalty, then your fraction is:

(40/650) X (3/16) = 0.011538

So, yes, 1.15% is what you should be getting.


landownerPermalink Reply by Lalla Allen on March 29, 2011 at 9:45

We were told that the next checks were going to be alot better. I think they have to pay for the wells first.

 


landownerPermalink Reply by Mac Davis on March 29, 2011 at 9:58
No, your royalty payments don't deduct anything for well cost.  Just "production" costs.

landownerPermalink Reply by Mac Davis on March 29, 2011 at 10:17

Something doesn't add up. 

 

That well was only potentialled on 3/11/11.  It was only perfed on 2/11/11. They haven't posted any production info on SONRIS.  http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo2...

 

I'd be really surprised if you got any royalty check at all that quickly.  My operator sat on my money for about 5 months before sending any checks.  They're consistently 3 months behind. 

 

Is it possible it's a different well? 

 

What volume did they report?


landownerPermalink Reply by mskillerbee on March 29, 2011 at 11:12
The slow nature of payment seems to be the norm.  The well I watch, #241555, has production reported on SONRIS for Oct 2010 and Dec 2010 and I have heard nothing.  The last well log on SONRIS says they had a problem with a well ID sign so didn't pass some sort of inspection.  I wrote Petrohawk an email about a  week ago asking about production and division orders but no answer yet; I didn't expect one since most posts here say it takes them awhile to get back with you.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 29, 2011 at 11:47
The SONRIS Lite Well File, Lease/Unit/Well Production Section has an obvious typo for reported production.  As the well was not reported completed until the last week of Oct., the first month's production report should be dated Nov. 1 and include that one week of Oct. production (46,508 MCF).  The first full month of production (166,045 MCF) was for Nov. and was reported on 12/1.  It's just now becoming time to look for a check.  The first royalty payment on average is received about 90 to 120 days after initial production is reported.  Since the first full month of production was for Nov. reported the first of Dec., the first royalty payment is just now becoming due.   If you do not receive a check in the next two weeks, it's time to call Petrohawk.

landownerPermalink Reply by Mac Davis on March 29, 2011 at 15:24
Just to be clear, Skip is talking about mskillerbee's well, not CBT's well.

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