What happens when a Well reaches payout status but you are not notified until over a year later?  Does the 180 rule apply?  What are the penalties against the O & G Company?



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Along with the 180 Law questions:

(1).  Why would a company send the same Quarterly Report for the same quarter but different figures?

(2).  My family was told that the LOE did not apply to an UMO but the Oil & Gas Company told us the oppisite.  Which is correct?

All UMOs should know their well cost and review their quarterly reports for payout.

1.  I  have no idea.  Have you asked your operator?

2.  UMO's pay LOE. 

Hi Skip,

     In review of the quarterly reports, I have found many "questionable" errors.  When I bring it to the attention of the operator, they always have an explanation.  My question is, what is the purpose of the Sworn Statement that is attached to these Reports?

     I am in contact with the operator.  They did notify me that this Well had paid out...in the form of a Summary Statement.   However, I did not know that the Summary Statement meant that the Well had reached payout status. I found that out when I called them a few weeks ago and asked questions regarding the Summary Statement.  That is when I was told that the Well had reached its payout.  

     Since I am part-owner to three Wells, the Initial Well and two Alt Wells, every Quarter, I receive three different Quarterly Reports which the operator sends to me in one envelope.  However, since some of the Reports have been or are missing from this operator, because I have signed for the one envelope, the operator is able to say that they have sent all three Reports to me, even though the envelope may only contain one Report.  When I asked the operator to please send the Quarterly Reports in seperate envelopes, they told me that they could not financially afford to do so.  So, as of now, I'm stuck with waiting for Reports that I have not recieved from the operator, but the operator has a record showing that "I signed for them.

     As a UMI, I know that we are responsible for the drilling, testing, completing, equipping, and operating of the Well, but are we responsible for the marketing, gathering and transportation costs?


Thanks Skip so very, very much for your response!


If the operator is shorting  you on well reporting, is the operator paying you your share of well proceeds less operating expenses?

LN, your questions are best answered by an experienced O&G attorney.  I expect that marketing, gathering, treating and transportation costs are applicable to a UMO however the question would be are those charges reasonable and required for your particular production?

Hi Bob,
Because the operator has not sent all of the Quarterly Reports to me, I have no idea if they are paying me my fair share or not. They did not send the March, 2012 Quarterly Report to me until 2016. When I asked them how could a 2012 Quarterly Report have a 2016 creation date, they never answered me.
They did send an email of a JIB to me and also two of the Quarterly Reports that I should have received several months ago. I requested these Reports via certified mail USPS.
I do not understand how it is allowable for the Operator to send three different Quarterly Reports in the same envelope as if it were bulk mail. Please let me know if I have answered your question.

The 2012 Quarterly Report that I received via email and finally certified mail was for the Initial Well (Primary Well).

LN sounds like you need to hire an O&G attorney. This is the reason why most people grant leases to the oil companies.

Should read: The 2012 Quarterly Report that I received via email was for the Initial Well.

LN, if the operator who claims he cant afford envelopes and stamps sent you a report in 2016 that was due in 2012, you are being played or the operator is simply not competent. At this point, you should seriously consider consulting with an attorney specializing in oil and gas work if you possibly can, before you get skinned up all over. 

Hi Bob,

Your advice is so very much appreciated!

Best of luck. Hopefully you won't need it. 


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