Replies to This Discussion

Permalink Reply by HBP on February 13, 2014 at 9:55

Unit size is one thing, and Skip may help you run that down.  But if you haven't received notice of the dissolving units and this started immediately when Wildhorse took over, then I think you have more here that should be handled with an attorney familiar with royalty demand.  As Mr. Aldridge said, it is not expensive in relation to how fast and effective it can be.

Obviously you want to confirm there is an error, but if entire wells are missing from the change over, then its better to put them on notice and start your 30 day response time under the code.

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Permalink Reply by Skip Peel - Mineral Consultant on February 17, 2014 at 15:00

Susan, Wildhorse assumed operatorship of all these unit wells (6 in HOSS C RA SUJ and 24 wells in BRC CV SU) in October 2013.  E&P was operator prior.  E&P was reporting liquids and gas throughout the production history.  Wildhorse is only reporting gas.  I don't have an obvious reason why.  As to the difference in the decimal interest from E&P to Wildhorse I can only guess.  Wildhorse may have had their land/legal department review the original El Paso Division Orders and that resulted in a change in your fractional interest.  Or they had the unit resurveyed and the total unit acreage changed which would change your decimal interest.  You will need to contact Wildhorse to find out if this is correct and to seek information upon which they would have based a change.

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Permalink Reply by Susan Livingston on February 17, 2014 at 15:07

Hi Skip, Thanks for the valuable information and insight into this!  WH says that they have an 'Analyst' researching the decimal interest differences.  I'll keep working with them, to a point, to get some reasonable answer.  

Thanks ever so much for your help!

Best wishes, Susan L.

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Permalink Reply by Skip Peel - Mineral Consultant on February 17, 2014 at 15:21

You're welcome, Susan.  You might also ask about the liquids no longer being reported in October and November.  The state database also does not have any report for December.  It should by now.

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Permalink Reply by Susan Livingston on February 17, 2014 at 16:08

Thanks, Skip! That is more valuable information!  I have already sent the Email to them!  Thanks so much and Best Wishes, Susan L.

Permalink Reply by Susan Livingston on February 20, 2014 at 8:47

Hi Skip, the WH accounting dept had this response.

Does it make sense to you ?

Thanks, Susan L.

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To answer your concern regarding Liquids on the wells that you have an interest in, these wells are dry and do not produce NGL’s.   Are you asking about Oil? If so, these wells do not produce tons of oil each month and sales is based on when the tanks out in the field reach a level that the trucks will come pull a load for sales.  

 In the meantime I would suggest you provide a copy of one of your EP revenue checks so we have something to compare the volumes for both gas and oil against.

Permalink Reply by Skip Peel - Mineral Consultant on February 20, 2014 at 9:19

Susan, the response is pausible.  Without looking back at the production history (I'm in a car dealership at the moment) the wells may have declined to the point that liquid production can be transported less often than every monthly.  There is a tank battery on the well site or nearby that collects/stores the liquids.  If the tanks have a 500 barrel capacity and the wells are flowing at a rate of 150 barrels per month, the company may choose to transport them every other month or every third.  This is common and the production report on SONRIS Lite will show periodic production but not monthly.   As to whether the liquids produced are "oil" or condensate remind me later and I will look.  Oil does not have associated NGLs, condensate generally does indicate the presence of NGLs.

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Permalink Reply by Nixon Dow on February 20, 2014 at 9:43

Actually under the case you are describing SONRIS lite should show the monthly production, as long as the company is following state reporting protocol. The state requires the operator or producer to report each month's production regardless if they sell any of it. The column that labeled (disposition) is the amount the operator reports to the state as being sold or transported that month. The "stocks"column is the amount of oil the battery or storage tanks should have at the beginning of the month.

By using this system of reporting it allows the state to audit production by: 1) sending someone out to the well site and check storage level and 2) using the data from both the producer and transporter (they have to send a separate report on the amount they transfer each time from each site) as a checks and balance to make sure everything adds up. 

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Permalink Reply by Susan Livingston on February 20, 2014 at 12:33

Thanks Skip and Thanks Nixon!

More from WH on the different Royalty Interest %, from the check stub comparisons:

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El Paso pays on disbursement decimals which do not always reflect an owner’s true interest.  For example, the spreadsheet that Ms. Livingston provided showed her being paid by EP on different decimals for each of the Bailey wells.  This makes no sense as they are all in the same unit, and her interest is the same for each well in the unit.  

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Permalink Reply by Skip Peel - Mineral Consultant on February 20, 2014 at 13:36

Once again sounds plausible as each well within the unit should have the same decimal percentage interest.  If you think you have an accurate acreage figure for your mineral interest you can ask WH for the figure they are using for total unit acres and then do the math yourself.

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Permalink Reply by Susan Livingston on February 27, 2014 at 9:23

Hi Skip and Nixon,

Wanted to let you know that the Feb 2014 check now reports both Gas and Condensate!   The check amount is much closer to what I would expect.

I wrote WH to ask if they are going to give us Back Pay for all the months where they only paid for Gas, which probably accounts for the 'missing money'.

No word yet.

I'm keeping close eye and I'm still not sure everything is correct, but we are looking better, in any case.   

Thanks again for all advice!

Best Wishes, Susan L.

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Permalink Reply by Skip Peel - Mineral Consultant on February 27, 2014 at 10:40

You're welcome, Susan.  Send those letters certified mail and keep copies of all your correpondence.

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