Replies to This Discussion

Permalink Reply by Ethan Riggs on June 6, 2009 at 6:20

I understand that. There were just some people in my group that are just trying to get an idea of what they should be looking at per acre.

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Permalink Reply by VSC DeSoto South on June 7, 2009 at 1:51

"Some of the operators have statements where their gas price is lower than another operator (per unit of gas) in the exact same field."
Has anyone been able to put together a comparison of costs and well head prices, other measures each operator charges? So one could compare them side by side.
Could patterns be gleaned from TX, Barnett? Although a different state and area wouldn't the same operators, probably charge more in the Haynesville, if they get away with it there?
if an owner was to be able to prove their operator was charging more than the same operator, in the same field, taking pressure and choke into consideration, be able to sue or in some way work to move the operator toward being in line with the fairness?

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Permalink Reply by king john on June 7, 2009 at 2:35

vsc
im involved with three operators and the difference in the price they each got for their gas for the month of feb. varied by almost 50 cents. when put into a percentage that equates to about 14%.
kj

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Permalink Reply by Grillin' - MmmMmm on June 10, 2009 at 1:50

In many cases, different operators will have different gas sales contracts with different pipelines, resulting in different prices. Very common and legitimate. Many in South Texas have gone to leases with payments based on certain pricing points/benchmarks. But be careful what you ask for as these can sometimes come back and bite you.

And I'm not sure about Louisiana, but in Texas there are credits and exemptions for certain well types that give you a reduction in severance tax rates until a certain amount of the drilling costs have been recouped. And this is on a well-by-well basis. So two wells sitting 80 acres apart can have very different severance tax rates. Does La. have any type of severance tax allowances for horizontals or tight gas wells?

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Permalink Reply by Grillin' - MmmMmm on June 10, 2009 at 6:17

Thanks KB. So if someone sees a different severance tax % on one well that is different from another well, that doesn't mean someone is doing anything wrong or crooked.

Always always check your royalty check calculations, but don't go looking for thief wild eyed! There are enough other things to check and make sure the numbers are crunched properly.

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Permalink Reply by Bacon on June 7, 2009 at 8:53

Just curious if you or anyone else have compared checks with any of the royalty estimators? Close? Not close? Consistently not close? Thanks.

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Permalink Reply by Mac Davis on June 7, 2009 at 17:21

Hopefully, they're not dumb enough to do the math wrong. They would cheat by falsifying the production figures, acreage, what they get paid for the gas, calculation for heating value vs. cubic feet, not including condensates, not including hydrocarbons removed with salt water, phony charges, "losing track" of payees, etc.

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Permalink Reply by Mac Davis on June 9, 2009 at 6:58

Hopefully, there's no disagreement about the formula, the hanky-panky comes from manipulating the inputs to the formula. There's so many ways to cheat on the inputs to the formula.

Or do they really come up with different answers given the same acreage, unit size, royalty percentage, and "money in*" to the formula?

*Money in - What is the correct term for "payments received from mineral sales, minus management fees, expenses, and other allowable deductions?"

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Permalink Reply by Ethan Riggs on June 14, 2009 at 10:58

I dont know what the honesty of the oil and gas people are, but I have 18 un-leased mineral owners in my section. we are sending a certified letter to Chesapeake on behalf of all of us, and we have decided to be like the one wheel on the wagon (hence the saying, "The wheel that squeals the loudest, gets the oil"). We may not do any good but at least we'll be heard.

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Permalink Reply by Robert Griffin R on June 15, 2009 at 2:02

How can an operator "not know about" each and every landowner in a drilling unit? That ownership information is public knowledge at all parish tax assessor's offices in the form of public maps of individual properties with each owner's name plus tax assessment records contain names and mailing addresses of all landowners in a unit. All operators are required to send written notice of scheduled public hearings on unit applications to every landowner in a proposed unit and "persons of interest" in adjacent sections? If operators aren't legally bound or required to inform unit landowners of public hearings on unit applications and they aren't required to notify landowners of the start of drilling operations and they aren't required to notify landowners of the start of production then at what point in time are operators legally bound to notify landowners of the "existance" of a well they have drilled and placed in production? Is there a statute of limitations (months, years) in the Louisiana mineral code or federal law that exempts operators from paying retroactive royalties and/or revenues if they pump/suck/steal oil and gas from beneath a landowner's property, sell the minerals and pocket the proceeds of the sale for personal gain without ever informing the landowner of the existence of a well? Are operators required to show any form of tangible proof that they made ongoing (year after year after year) "good faith" efforts to identify each and every landowner in their unit that they were taking and selling their minerals? Is it every resident and non-resident landowner's legal responsibility to "know about" each and every thing that occurs in their section no matter how large or small or is it the operator's responsibility to notify landowners of their drilling and production activities?

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Permalink Reply by The_Baron on June 15, 2009 at 4:34

Tax Assessors keep track of surface owners, not mineral owners. mieral owners may be impossible to find, or title may be difficult to determine.

Mineral owners who are due royalties are identified in a title opinion and division order. If you feel you have been excluded, you need to contact the operator.

And yes, you can only reclaim unpaid royalties from the last three years.