Finally received 1st royalty payment for sales through February 2012 from XTO for the Cardinals DU #1H well in Shelby County, Texas.   It's been producing and have had gas sales since April, 2011 (over 1 year ago) and gas production has been dwindling each month.  Is it possible for production to level off or will it just deplete to "0"?  Another question is - Is it possible for XTO to drill another well in the unit this well is located in and/or can our interest be included in another unit if another one is formed  (or when the Cardinals quits producing in paying quantities, is that all the royalties we will ever receive from our mineral interest?)  Was hoping to receive monthly royalty checks from this well for many years (or what is the norm for the wells being drilled in Shelby County?)   Still no division order yet.

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This unit is holding 581 acres per the TRRC which is enough acreage for XTO to drill additional wells when gas prices increase.  There may be potential also for other productive reservoirs in the same unit in the James Lime, Pettit, Travis Peak or Cotton Valley.   If you lease is in the Cardinal Unit and it quits producing the lease will no longer be active and held by production.

If it quits producing and the lease is no longer active, how would it be HBP? Maybe you meant to say ,' longer held by production'?

I do agree additional wells would probanly be drilled when gas prices rise.

Very interesting. Has been producing since April, 2011 and you just now got your first royalty payment and had not yet received a Division Order. Sounds like somebody is not on the ball. Have not known XTO to do this. Our checks are getting smaller from XTO and also SWN. We signed a DO from Chesapeake and mailed it back the first week in April. Deadline was the 20th and ours got there pronto. Come the 1st, NO check. I called and asked why and the lady said they were not processed until the 23rd. Deadline was the 20th. I expressed my opinion of our doing our part, but they certainly did not do theirs.  She said the checks would be mailed out June 1st. No explanation. Sounds to me like things are not good at the top? I cannot answer your question, but I would think that XTO could drill another well in that unit. Good Luck to all of us.

Several years back, we got a royalty payment and NEVER received Division Orders.

I didn't realize you could get a royalty payment without signing a DO.

Our DO from Sonnera came Sept '07.  Our first check was Mar '07 from production starting July '06.

Our DO from EOG came Apr '12.  First check was Mar '12 from production starting Sept '11.

Probably a normal occurance.


Congrats on getting your check!

Dennis, your unit is big enough (depending on shape) for 7 wells on 80 acre spacing or 5 wells on 120 acre spacing.  That's not counting stacked wells, in both Haynesville and Bossier, either.  So, you could double those well numbers, eventually, if both intervals are viable in your area.  It is also possible that the actual unit acreage is larger, than what the unit plat shows, if XTO turned in more acreage on the Unit Designation (county records). 

would we be notified if a new well is permitted or is to be drilled in our unit?  how would we know if / when another well is drilled?  thanks

Dennis---- No in generally the  Royalty owner is not notified about new wells permitted. If a new well requires a new pad site the landowner will know about it since a ROW agreement will be required. The best way is to check the Texas RRC site every month or so to see if XTO has filed for new permit. This however doesnot say it will be drilled or when-- permits in Texas are good for about 2 years. If you see permit then have some one in area tell you if they see rig or check Les B drilling rig list every week to see if XTO has new rig working and Les B maybe able to tell you what well it is drilling

thanks for all the replies.  we shall see how long it takes to get the Division Order and hope for gas prices to go up so more wells might be drilled. 

Dennis-- that a nice well already made 1.7  Bcf first year and still flowing at 2mmcfd-- that well should make 6-8 Bcf over 20 year+ liftime. Typical 70% decline in first year but should hold 1+mmcfd for good time before major decline to minimal last few years of life.  The plat has room for at least 5 nice long H/S lateral wells-- so be patient in years to come when prices improve they will drill more wells.


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