Replies to This Discussion

Permalink Reply by JAMES SMITH on May 19, 2011 at 16:37

Ms KCM or Susie,

Was ask of me today told them I dont know this is new to me, but after the first lump royalty payment if your first monthly check in August 2010 was 1800.00 about how much will they level off to in about 12 months? They said that it is down to 1100.00 for May check.

Permalink Reply by Susie Brown on May 20, 2011 at 10:51

James it depends on the well's production & the amount of acreage and if you have a no cost clause in the lease.  I know Sec. 7 production went down for Feb. FXEF do you have any knowledge about this? I think they were tubing sec. 7 during Feb., but can't remember. If so that would have stalled production for that month

Permalink Reply by Skip Peel - Mineral Consultant on May 20, 2011 at 11:01

The first royalty check usually covers several months of production.  The second covers one month and will be substantially less.  Depending on the choke setting on a well, the production will decline from 50% to 80% in the first year.  Understanding decline rate as it applies to royalty income is important in wisely managing the income stream.

Permalink Reply by kittycatmama on May 20, 2011 at 11:51

Skip, do you have any info on Sec. 7 specifically? I think in Feb. they "tubed" the well and it was shut down for awhile. Drastic drop in royalty ck. for Feb.

Permalink Reply by Skip Peel - Mineral Consultant on May 20, 2011 at 12:29

Specifically, the Well Test section of the SONRIS Lite Well File indicates that EnCana changed the choke setting on both the Section 7 and 6 wells.  Section 7 was on a 23/64" choke which was closed to16/64" for the period 4/1 - 5/1.  And Section 6 was on a 22/64" choke which was closed to 15/64" for the same period. Changing production from the casing to coiled tubing doesn't take that long nor does it affect the production rate as far as I know.

Permalink Reply by Linda Whatley on September 6, 2011 at 4:17

FYI:

 

We just received a "revised" division order from Chesapeake for Section 6 T14 R14.  The first check we received was at the decimal interest that was shown on the original DO that we received back in December.  The second check we received had an adjustment to a lower decimal interest (without any prior notification), and all subsequent royalties have been paid at the  lower decimal interest.  Our owner interest is very small (just a little over 1/2 acre), so I wasn't verifying their calculations..... my bad!!! Anyway, I guess they discovered their error so that's why we received a revised division order, which by the way, doesn't contain enough information for me to accurately verify the new decimal interest!!!........   Gave em a call, still waiting on a response!!!       

 

Did anybody else receive a revised DO???

Permalink Reply by Linda Whatley on September 7, 2011 at 3:12

I just got off the phone with a very nice young lady with Chesapeake who told me the reason for the revised division order.  She said they used the wrong map to determine the unit size on the original DO.  The correct unit size is 647.385 acres.  Adjustments will be made on subsequent royalty checks.  

Like I mentioned above, Chesapeake had decreased my decimal interest much lower than what the final revision shows, so the adjustments to prior payments will be to my advantage. 

 

Permalink Reply by kittycatmama on September 7, 2011 at 4:25

Hi Linda, can you post a good phone no. for Chesapeake

Permalink Reply by Linda Whatley on September 7, 2011 at 8:18

Hey KCM,

 

The young lady I talked to is the one who prepared my revised division order.  Her name is Nellie Ferguson, and she can be reached at her direct line 405-935-2208.

 

Hope you are having a great day!

 

Linda

Permalink Reply by kittycatmama on September 7, 2011 at 11:55

How long did it take you to get a DO from the time the well went online? This is our first dealing with Chesapeake. Well went online mid March & still no DO. With Encana & Petrohawk, we had our first checks in 4 months after well went online, so I am spoiled.

Permalink Reply by Linda Whatley on September 7, 2011 at 16:42

I got my DO from Chesapeake (operator) within three months on two wells that I have in the southern part of Desoto Parish.  But it was over six months before I received a DO from Chesapeak on Encana's Virginia Packert well in Section 6 T14 R14. 

Permalink Reply by DeeDee on September 8, 2011 at 1:00

I hate that their stubs tell us nothing!

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