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Permalink Reply by Varice Mire on June 20, 2011 at 13:34

Lady?!?! What the hell makes you to think that I'm a woman?

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Permalink Reply by Spring Branch,mineral owner on June 21, 2011 at 6:36

Never heard of the name Varice before.  It's hard to see through the internet.  My apologies.  I know a Mire living in Shreveport who's from South Louisiana.  First name Dickie.

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Permalink Reply by Varice Mire on June 20, 2011 at 14:48

Henry, A JV DO - a good theory… my inherited lease has changed many hands since it was signed in 2000. The current royalty payer is not the same company that sent the DO, and neither one of them is the company that had the new Haynesville Shale well drilled!

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Permalink Reply by Varice Mire on June 29, 2011 at 20:38

Henry, an excellent call. It seems that you have the correct answer. The company that sent the DO finally called back and stated that they will be obligated to pay only a small percentage of the royalty with the remainder being paid by another company as a partner that has the remaining interest in the well. The percentage that they claim reconciles for the most part with my acreage, the unit acreage, and my HBP lease royalty fraction against their decimal interest claim in the DO.

 

It’s really too bad that the company sending the DO made no effort to explain their decimal interest calculation in the DO letter, especially the apparent joint venture split. They are supposed to be a partner with the mineral owners, not an adversary. I would expect my business partner to explain how such an important number was calculated before asking me to confirm and sign a decimal interest DO. Is this just business as usual? Maybe so. But it shouldn’t be! No explanation of the calculation is ridiculous and unacceptable. If this is common practice, then i should change.

 

Thanks for the informative reply Henry.

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Permalink Reply by Varice Mire on June 29, 2011 at 21:02

a typo:

... If this is common practice, then it should change...

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Permalink Reply by Henry on June 29, 2011 at 23:54

Vance,

Sometimes I get lucky on my guesses....  Glad I could help.  We've seen many people who leased to CHK receive checks from both Plains and CHK as a result of the Joint Venture.  The interesting  aspect of this is that Plains seems to pay the mineral owner a much higher price for gas than does CHK -- usually about 50 - 75 cents more.  Same gas, same lease, different price.  Go figure.

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Permalink Reply by DO Analyst on June 27, 2011 at 2:52

Questions you will want to ask is this.

 

Unit size compared to previous unit

 

Unit plat compared to previous - if the area is different it is possible not all of your acreage is in the unit which would lead to a reduced decimal

 

Marketing and Burden arrangements - who is the operator, who will be paying your royalties.  as an example, if CHK is the operator and PH is the leaseholder.  if PH is marketing with CHK but paying their own burdens, you could see a 3-4 month delay in royalty payments because PH will be waiting for the payments from CHK before making payments to royalty owners.  This is pretty standard, I use those two companies because they are two of the larger ones working in the area, but any time you are receiving your royalty payment from a non operator, be prepared for a little bit longer lag time.

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