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Permalink Reply by Skip Peel - Mineral Consultant on December 11, 2022 at 12:04

This response supposes that you are asking about Louisiana wells. You are not a Working Interest, you are an unleased mineral interest (UMI). The mineral code is specific and both are treated differently. If you were a Working Interest that hadn't paid their way in the well(s), you would be under a 200% Risk Penalty. The well(s) would have to recover twice their cost to drill and complete and that is calculated on net revenue, subtracting royalty burden, severance tax not rebated and other post production costs that operators take but are not authorized in the code. This is a question before the courts presently as it pertains to UMI. As a UMI, you are under no risk penalty and would receive your proportional share of production less Lease Operating Expenses (LOE) when the well(s) reach 100% payout. What you need to do is send a demand letter for quarterly reports of well revenue and costs so you will be able to track the well(s) to payout.

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