landowner

90 days are up, now what?

Is it the norm for a company to pay out the first royalty check late? And if so, how long will it take to receive the first one. They haven't sent a do yet.

 

Thanks

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Oil & Gas ProPermalink Reply by Ben Elmore on September 12, 2011 at 2:55

90 days are up subsequent to what?  First sales?  Are you in TX or LA?  In TX the operator has 120 days after the date of first sale of production to make the first payment. 


landownerPermalink Reply by Ken Boone on September 12, 2011 at 3:32
I am in LA. The company said they had 90 days to send out the Division Order once the well was drilled.

landownerPermalink Reply by Ken Boone on September 12, 2011 at 3:38

Wow. So if 4-6 months is the case, then will the first include 4-6 months worth of payments?

 


Oil & Gas ProPermalink Reply by HBP on September 12, 2011 at 3:47
They will pay you back to date of first production up until about 2 months prior to the check in most cases.  So your first check will sometimes cover the first few months.  You will always be getting paid in one month for production from a prior month (either one or two back).  But all in all you are supposed to be paid for every month of production.

Oil & Gas ProPermalink Reply by The_Baron on September 12, 2011 at 7:17

Some companies do have a minimum amount you have to have before they will send a check.

 

 


landownerPermalink Reply by j garrett on September 12, 2011 at 15:22
Wrong Roy.  Once checks are flowing monthly, you are getting paid for production from 2 months back, ie your September check is for July's sales.  Your first check will be a "jumbo check" from IP to 2 months back.

landownerPermalink Reply by j garrett on September 13, 2011 at 14:36
They don't "hold two months back". They simply pay on a delayed schedule, partly to give them time to account for everything, and partly because by law they have that time.  If they plugged your well, you'd get paid through the last day they sold gas.

Oil & Gas ProPermalink Reply by The_Baron on September 15, 2011 at 3:43

 I believe Mr. Garretts point is almost everyone is TWO MONTH BEHIND!

 

 


landownerPermalink Reply by Robert on September 15, 2011 at 17:41
Glad I read your blogs. CHK completed my well in Sec29 T11N 12W on 4-8-11. Production for April, May and June is over 800mmcf. I am supposed to get paid this month or by 10/15/11 at the latest. Haven't heard about the DO. Jennifer with Chk said I could call on 9/16/11 for an update. Think I will. I would appreciate any advice. Thanks

landownerPermalink Reply by j garrett on September 12, 2011 at 11:51
My first check took 14 months.

landownerPermalink Reply by Ken Boone on September 12, 2011 at 13:31
Are you serious?

landownerPermalink Reply by j garrett on September 12, 2011 at 15:17
Yep, 14 months.  The first check is nice because you do get multiple months payment.  Generally, don't get alarmed if it is 6 months.  I've got 4 wells now that were completed between last Dec and Feb and they've not paid yet.  Should be a good check when they do!

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