Unleased, forced in to pool for producing well, what now?
I have read a lot on here and it clears up some questions, but I wish someone could tell me what to expect here.
My M-I-L owns a very small, .1 acre lot, in Keithville. The land was never leased, but now CHP has a well under it, on line and producing . I talked with her neighbor and she said, she got a letter from CHP saying that in January they would receive papers explaining the royalty payments they could expect to start getting soon. A land man representing CHP called me this week wanting to lease the property for $100 an acre, so she would get ten bucks and 25% royalties. I just told him no, force pool her. Now I don't know what I have done.
Will she get more royalties being forced pooled?
Am I right she won't get anything until the well is paid for?
We don't have any paperwork with CHP now, what can we do to make sure she gets something?
I just thought with only a 10 buck bonus, it might be better to just wait it out and see if she wouldn't come out better this way. This is the well off the Mansfield road near the Keithville cemetery. T16 R14 S28 i think
There isn't enough to made off this tiny property ether way to justify going to a lawyer, so I am coming here to seek what ever advice you all might have to help her get as much as she can.
Thank you for all help.
My M-I-L owns a very small, .1 acre lot, in Keithville. The land was never leased, but now CHP has a well under it, on line and producing . I talked with her neighbor and she said, she got a letter from CHP saying that in January they would receive papers explaining the royalty payments they could expect to start getting soon. A land man representing CHP called me this week wanting to lease the property for $100 an acre, so she would get ten bucks and 25% royalties. I just told him no, force pool her. Now I don't know what I have done.
Will she get more royalties being forced pooled?
Am I right she won't get anything until the well is paid for?
We don't have any paperwork with CHP now, what can we do to make sure she gets something?
I just thought with only a 10 buck bonus, it might be better to just wait it out and see if she wouldn't come out better this way. This is the well off the Mansfield road near the Keithville cemetery. T16 R14 S28 i think
There isn't enough to made off this tiny property ether way to justify going to a lawyer, so I am coming here to seek what ever advice you all might have to help her get as much as she can.
Thank you for all help.
Tags: force, pooling, royalties
Views: 196
Replies to This Discussion
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Permalink Reply by The_Baron on -
I would think that an estimate of the costs may not need to be a detailed as an AFE. What do you think KB?
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Permalink Reply by The_Baron on
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You may have a hard time proving some costs like "geology fees" are not legitimate. These are costs not billed out to the working intrest owners, it would be included in their inital investment.
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Permalink Reply by Les Bamburg on
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Baron, all costs are "billed" to WIO's whether they are capital or operating costs. That is the only method for collecting payment.
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Permalink Reply by Les Bamburg on
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Baron, an estimate of cost is essentially an AFE - really no difference. Any costs included in the AFE or estimate have to be allowable under COPAS.
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Permalink Reply by Les Bamburg on
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Jim, I think monthly pay-out statement would be more likely with any back-up documentation since the operator cannot "bill" the carried interest owner.
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Permalink Reply by Bobi Carr ("parker") on
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Les,
I can't reply to your last post, so I am replying here.
I would expect that certain costs would be deducted.
I was speaking about liability, in the event of some sort of mishap.
It would seem to me that a working interest owner would be on the hook beyond there revenue whereas a force pooled owner would only be on the hook for the profit.
As I stated, this is just my layman's opinion.
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Permalink Reply by Les Bamburg on
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Parker, because liabilities only impact WIO's as costs it is more a matter if such costs are chargeable under the JOA. The only difference is the consenting WIO could be billed up front for their share while the carried interest owner's share would be deducted from revenue.
An example might be if a land-owner's property was damaged while drilling a well. If the operator had to pay for the property repair then the cost may be allowable under the JOA and considered as a reasonable deduction against revenue.
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