Now what? Where's My Royalties - It's been 10 Months!

I am an unleased mineral owner on a section that has a producing gas well on it. Section 34 range 11, Samson Contour. It has been producing since last october,2009. I have recieved nothing from the company regaurding operations or anything else. Should I recieve anything at all from them? I have been told I should have recieved an owner number. To date I have recieved nothing. When should an UMO expect to start seeing royalties after a well has been put on the market?

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Permalink Reply by Les Bamburg on June 27, 2010 at 3:57
Harvey, if you are referencing the following well then it has been on production since June 2009. The well has produced ~ 998 MMcf of gas thru March 2010.

Because you are unleased (Carried Working Interest Owner) you will not receive "royalties" but rather will receive a share of the gas production (revenue) after the operator has recouped the cost drilling the well and any operating expense. The well has likely not reached payout status so the reason you have not yet received any payments. Having said that, I believe the operator should be sending you monthly pay-out statements indicating the well's progress toward reaching payout. This information should include the cost of the well and the monthly revenue and operating expenses.

Samson, Hall 34 #1 Well, Serial #239461, S34-T18N-R11W, Bossier Parish, 7700 Mcfd, 20/64" Choke, 4600 psi Flowing Pressure
Permalink Reply by Dion Warr, CPL on June 27, 2010 at 5:15
Les:

Per LA R.S. 30:103, monthly reports containing the amount of oil and gas produced, disposed, and/or saved (or undisposed) to any interest owner who has furnished his name and address to the operator.

As to the other information:

Per 30:103.1.A(2), reports are due to be sent no less than quarterly - it would be up to each operator if they would (or could) issue those reports monthly.

Per 30:103.1.C, reports shall be sent by certified mail to each owner of an unleased oil or gas interest who has requested such reports in writing, by certified mail addressed to the operator or producer. The written request shall contain the unleased interest owner's name and address. [Emphasis added.]

Thus, should Harvey desire this information, he should send a written request for same in the manner listed above. It probably wouldn't hurt to cite his full property description (include at least section, township, and range), the operative unit and well(s), and the appropriate statute. The full text of the statute is available on Justia (www.justia.com) and other sources. The company is not obligated to send out reports to those who do not show sufficient interest to properly request them. I am not sure as to his eligibility to receive 'back issues' of the reporting, but it never hurts to ask.
Permalink Reply by Les Bamburg on June 27, 2010 at 16:15
Dion, thanks for the additional information and clarification. Too much of my past experience relates to farm-outs or non-consent situations as an O&G company so I am less familiar with the actions required by Carried Working Interest Owners.
Permalink Reply by sesport on July 9, 2010 at 18:50
Just here to thank you, Dion. lol 80)
Permalink Reply by Henry on June 27, 2010 at 4:42
Harvey,
Read this. It should explain a lot to you.
Attachments:
Permalink Reply by Dion Warr, CPL on June 27, 2010 at 5:25
Henry:

Agree. Always useful to the UMI. The above cited commentary dovetails specifically to Point 11, pages 6 and 7 of the attached document.
Permalink Reply by flatlander on June 27, 2010 at 16:06
The UMI basics by caliente is exactly where I got all my information for contacting my operator. Sometimes the operator does not know how to contact you so you of course have to contact them. I had to give proof that I owned my minerals. Once I had that and the section-township-range info I put it all together referenced the legal info and I mailed it all certified mail to the operator. I believe in less than 1 month I had recieved all the well costs. Now I know what the costs of my share of the well. I'm not getting information every month on the well production, but I am getting one every quarter. Works for me, hope it helps a little.
Permalink Reply by P.G. on June 27, 2010 at 16:18
Give proof of mineral ownership?
Is there somewhere that can be looked up?
Permalink Reply by Dion Warr, CPL on June 28, 2010 at 4:40
PG:

Your friendly neighborhood courthouse would be the answer. But you need to be sure to go far enough back to prove up your mineral ownership (which in LA usually involves going at least 10 years prior to the first drilling and/or production that would affect the property). That might require some mineral history work.

If you're unfamiliar with the courthouse, or you live in an area where drilling and production has been extensive, consider enlisting the services of an abstractor or landman to assist you.

If there is a large amount of money involved, or you feel like the E&P company is giving you the runaround, consult an attorney.
Permalink Reply by P.G. on June 28, 2010 at 12:56
I thought in Louisiana, mineral rights belonged to the property unless they were held otherwise by some lease. If there were no drilling activity or active wells in the area in the past 10 years then what would there be to find at the courthouse?
I would think that if someone came in and drilled a well and were harvesting my minerals and owed me money from it, it would be up to them to prove why they didn't owe me rather than them making me prove why they do... Especially if you told them you have never leased or sold your mineral rights to anyone in the last 10 years..
Permalink Reply by Two Dogs, Pirate on June 28, 2010 at 13:09
P.G. 10 years of a title run doesn't give the whole picture. The only run that I would use in buying an OGML in high dollar territory would be patent forward.
Permalink Reply by P.G. on June 28, 2010 at 13:30
Well if someone were drilling under my land, stealing my minerals and I confronted them about it, shouldn't it be up to them to prove why they aren't harvesting MY minerals and don't owe me anything or have a claim? Aren't they suppose to know who's minerals they are harvesting? Wouldn't it be up to the drilling company to run the titles rather than the individual owners upon who's land they are draining? If I said I own the minerals they were draining, shouldn't they be able to slap down some paperwork that would disprove my claim? I can see where if they were to do that, I'd need to see an attorney asap..

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