Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 24, 2010 at 10:15

The operator makes royalty payments directly to all mineral interests force pooled in the drilling unit. It does not matter who you are leased to, the operator of the unit is obligated to pay all lessors based on the terms of their lease.

Permalink Reply by kittycatmama on March 25, 2010 at 1:38

We are leased with Petrohawk in several areas. Petrohawk is not the operator in any of those areas, however they have been great. As soon as well went into production, I contacted Petrohawk owner relations and made them aware of the well. They contacted operator, called me back several times. The operator was Encana. They also called and let me know they were paying Petrohawk. EVERYTHING went super, super smooth. Checks arrived middle of the month. I have not dealt with royalties from Chesapeake yet, but have some property leased to them & some property where we are unleased mineral owners. Waiting for well results where we will be UMO. This will be interesting as it will be our 1st experience as UMO.

Permalink Reply by Skip Peel - Mineral Consultant on March 25, 2010 at 2:45

Sounds as if you are getting the full "Haynesville" experience. LOL! I hope it all goes as smoothly as your relationship with HK.

Permalink Reply by Tahoe on March 25, 2010 at 2:47

What's UMO? Unleased Mineral Owner?

Permalink Reply by Les Bamburg on March 25, 2010 at 3:14

Tahoe, yes - an unleased mineral owner or what I call a carried working interest owner.

Permalink Reply by Henry on March 25, 2010 at 5:02

kittycatmama,
Would you mind keeping us all informed as to how your experiences as UMO are going? I would be very interested in hearing about how smoothly (or not) the process goes. Thanks.

Permalink Reply by Les Bamburg on March 25, 2010 at 3:22

Skip, I did want to say that it is not a given that all royalty payments are made by the operator. It is also possible that the lessee (non-operator) will make payments directly to the lessor as was the case described by KCM. This is strictly a function of the joint operating agreement or other side agreements between the working interest owners.

The lessor only has a contractual relationship with the lessee and should look to that party to make sure royalty payments are made.