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Permalink Reply by a on February 20, 2013 at 5:26

What do you want to proceed on?  They will send you quarterly payout reports to let you know where you stand on payout.  Once the well reaches payout then you will start to receive your portion of the well.  I am not sure there is anything else for you to do.

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Permalink Reply by HBP on February 20, 2013 at 6:39

pilgrim,

If they do not comply with 30:103.1, then they may not be able to claim your share of costs against your revenue.  BUT it is unclear whether they failed that or not w/o a few more facts and dates.

The Div. Order may assist here.  Assuming you retained a copy, what was the decimal interest set forth?  Because you want to confirm they also consider you unleased, some people assume they are unleased to find out there is an older lease that holds their land.  (please note that in LA you do not have to sign div. orders to get paid.  You can still give them tax id and address by letter if they do not have it, but signing is not a pre-req to payment).

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Permalink Reply by pilgrim on February 20, 2013 at 8:04

All our leased neighbors in our section are receiving royalty checks monthly.
Our decimal interest is 0.00154063 and we have owned our property since June 2001. If you need anymore information, please let me know.

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Permalink Reply by HBP on February 20, 2013 at 9:24

Thats close enough to indicate a decimal for 1ac unleased, so now you have to decide whether they complied with the mineral code on your request or not.  That is more of a fact question, but obviously it favors you if they did not and now cannot apply cost to your UMI, however I doubt they will proactively admit that.

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Permalink Reply by pilgrim on February 20, 2013 at 9:51

Thanks, we are trying to decide how to proceed.

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Permalink Reply by Greedy Landowner on February 20, 2013 at 11:21

I think that it is too soon to expect a response. It's been a while, but I think there was a 180 day period between well completion and the operator losing the ability to collect drilling costs. I got my initial report on the very last day allowed by law.

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Permalink Reply by pilgrim on February 20, 2013 at 12:25

GL thanks, where do you get the 180 days, we do not find that in the law?

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Permalink Reply by Greedy Landowner on February 20, 2013 at 14:48

This would be the time between well completion and the time that the operator loses the right to collect their share of drilling costs from you.  It has been several years since I read that section of the mineral code and my 180 days could be way off.  It could be 90 or 120.  I can't remember specifically but I do remember that I got my report on the last possible day.

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Permalink Reply by HBP on February 20, 2013 at 15:20

90 days.  but there are a few more factors involved before it would be worth filing a petition claiming unpaid royalty for your 100% share of the unleased acreage.  Just from what Pilgrim has presented here, this one has some good facts for that so far.

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Permalink Reply by pilgrim on February 20, 2013 at 15:42

What other factors should be considered?

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Permalink Reply by Greedy Landowner on February 21, 2013 at 2:45

Thanks for clarifying that. I couldnt remember without looking it up.

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Permalink Reply by Henry on February 21, 2013 at 1:33

Here's my two cents, so take it for that.  Yes, the operator owes you quarterly reports -- there is no doubt (in my mind) about that with the law.  However, the issue of whether the operator has forfeited is right to collect the well costs is more vague here, and I (who am not a lawyer), think the answer is that the operator still has the right to recover the costs of the well.  Here's why.

I was in a situation somewhat similar to yours.  After many letters and phone calls (far more than what is stated in the law), I finally was able to get my operator to send me the revenue/expense statement.  I figured that the law says he has to send me the statement after the second letter, and when he didn't, I figured he had forfeited his right to recover the expenses of the well.  The law seemed very clear (to me).

Well, it's not that clear.  As my attorney explained to me.....  Louisiana law very strongly supports the right of the operator to recover costs.  There is case law all over the place on that.  In my case, I needed to ask myself how I was harmed, and the answer is that I really was not harmed.  So what if it took 4 letters and 3 phone calls, rather than the 2 letters that the law requires?  Did I lose out on any money that the UMO should receive?  No, because my well had not reached payout.  The "intent" of the law is really to punish those operators who know about your claim, and refuse to pay up.  You are nowhere near that situation, and won't be, until your well reaches payout in a few years (if ever). 

So, how to proceed?  I'd suggest you start calling.  Sometimes there is a disconnect between the place where letters are received, and the people who can help you. You can try to see if your operator thinks he has forfeited his right to recover well costs, but I'll suggest he will argue back that the answer is no.  So just ask for the quarterly reports.  You could also see if the company is interested in leasing you.  They might (if it is not CHK), just so they don't have to send you quarterly reports for the next 100 years.  

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