Replies to This Discussion

Permalink Reply by David on January 10, 2011 at 1:59

Hello again,

 

Again, some newbie questions. We see that the Lauren Alston unit #1H has been completed (on a 22/64 choke, it potentialed 13.776 million cubic feet of gas). Does that imply that drilling has begun, or simply completion of the well structure? Given those figures, is it likely that Alston 2H will also be completed? EOG said we'd hear from them in December, but we didn't expect to . . . Thanks for your insights. David 

Permalink Reply by jffree1 on January 10, 2011 at 4:32

David, L A #1H is completed to sales and had production, in Nov., of 195,217 mcf.  The well was completed in mid-November so the December figure will reflect the first full month of production. 

 

I don't know of any reason why the L A #2H wouldn't be completed but the timing would be up to EOG and only they know...

Permalink Reply by David on June 15, 2011 at 3:12

Hello again . . . many months later. We are still in the dark and have received nothing official from EOG; they assured us up front that we'd see a check in December. I see no data on the Alston wells in the RR server.

 

In reply to an e-mail from another non-participating royalty rights holder, we heard this in March and again in April from the division order analyst at EOG:

 

"I just received an email from our field office stating that the division of interest is still being worked on.  We do not have a definite completion date as of yet.  However, we are aware that once beyond the 120 days we are subject to paying interest according to the TX Nat'l Resources Code."

 

Is this business as usual, or should we be investigating the holdup?

 

Curiously, David

 

 

Permalink Reply by jffree1 on June 15, 2011 at 7:15

David, I still have not seen production figures or a completion report on L A #2H so it probably hasn't been completed.  EOG has reported April for their wells in District 6 but a good many are still found under "pending" because they don't yet have a Lease ID # assigned.

It is more common than not that determining title to minerals/royalties in East Texas is a complicated process.  The mineral code provides for the operator to take more than 120 days to complete their DO title review and pay interest on the monies due.  I know it's difficult but you have to be patient and hope they get it settled to their satisfaction so division orders can be sent out.

 

 

Permalink Reply by David on June 15, 2011 at 12:49

Thanks once again for your insights and help.

Permalink Reply by David on October 21, 2011 at 2:55

Hello again,

 

I noticed this posting of yours elsewhere in the forum:

Reply by jffree1 on October 13, 2011 at 1:19pm

. . .

AL, I didn't look at your link but I think you are referring to Lauren Alston 2H.  That well has had problems for some time... they completed it back in April (no IP) and turned in the well record with a note that it had flowed for 9 days and died.  It looks like they re-worked it in August and got a test on it but the results were not good. 

Does this mean that we're out of luck with Lauren Alston 2H? I don't know what a company that has invested so much in a well does with poor results? I suspect you understand more of this than we do.

Thanks for any insights . . . David

 

(Still waiting on a payment from Lauren Alston 1H; now they say November . . . a good year+ after completion!)

Permalink Reply by jffree1 on October 21, 2011 at 3:27

David, I don't know... they might try to re-work it again but at some point that is a "diminishing return" proposition and it makes more sense to just write it off and (hopefully) drill another well. I imagine a great deal of study is going into the reasons for the poor results on this well and into the possible remedies, going forward.

Just so you know, they won't voluntarily pay interest on the royalties due.  You have to request the interest in writing.  Consult your own oil & gas attorney for more information or ask Ben Elmore in the Mineral Rights Group:

 http://www.gohaynesvilleshale.com/group/knowyourrightstexasminerallaw

Permalink Reply by David on October 21, 2011 at 4:15

Thanks for the quick reply. We had figured out that they wouldn't go out of their way to pay interest . . . and we do have a letter into their legal department. We wrote it rather than an attorney, so hope it flies.

 

Permalink Reply by David on November 8, 2011 at 2:16

Back with another question because you've been so helpful. We've been told by EOG that we'll see a check for Lauren Alston #1 this month. We also just received a "notice of appraised value" from the county, indicating the taxes that we'll owe to the county and Woden ISD as "property owners." We were under the impression that the actual lease holders were the property owners who would owe taxes. Is it customary/law that nonparticipating royalty right owners ALSO pay these taxes? Please advise.

David

Permalink Reply by jffree1 on November 8, 2011 at 3:08

David, you really need to consult a Texas tax professional who is experienced in oil & gas revenues & taxes. Also, call the Appraisal District office and the Tax Assessor and ask them to explain how mineral revenue taxes work.  It is my understanding that, if you receive royalties, you will get a tax bill from all taxing entities whether you own surface acreage or not.  I don't know much more and you will have to make some phone calls.

Maybe someone (who has already dealt with the tax issues) will weigh in and share what they know.

Permalink Reply by William Barnum on November 8, 2011 at 6:00

http://www.mineralweb.com/owners-guide/leased-and-producing/royalty...

 

What they are talking about is the ad-valorem tax - similar to property taxes - use the above link to get some good information.

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