Replies to This Discussion

Permalink Reply by Judy Smith on November 24, 2014 at 13:15

I had banked upon a Livingston Well!ll!

Permalink Reply by Skip Peel - Mineral Consultant on November 22, 2014 at 13:07

Yes, you are.  The owner of a mineral right under a lease is the lessor.  The party leasing the mineral right is the lessee.

Permalink Reply by Judy Smith on November 22, 2014 at 14:16

Again, Skip I thank you!

Permalink Reply by Skip Peel - Mineral Consultant on November 22, 2014 at 14:32

Judy, I suggest that you do a little homework to become more familiar with the basics.  Use these links:

http://www.gohaynesvilleshale.com/page/haynesville-shale-info

http://www.gohaynesvilleshale.com/mineral-owner-rights-101

Permalink Reply by Judy Smith on November 24, 2014 at 13:19

Tale care Skip.  Hope we get something from this well!

Permalink Reply by Skip Peel - Mineral Consultant on November 24, 2014 at 2:26

HBP - Held By Production. Leases are said to be HBP when they are included in a unit with a producing well.

Permalink Reply by Judy Smith on November 24, 2014 at 11:40

Skip, we have an interest in this well.  Does this mean we will get royalties soon?

Permalink Reply by Skip Peel - Mineral Consultant on November 24, 2014 at 12:13

Depends on how you define "soon", Judy.  The well is likely completed but it may be a little longer before Goodrich (GDP) announces the results.  Since this is a LA as opposed to a MS TMS well the Division Order analysis will be less complicated.  Still it's impossible to know just how much title review is needed and how long it may take.  Once an energy company has a producing well they commence a title review with a higher level of due diligence than what was done to offer the leases.  Back then they were trying to identify any owner that might have an ownership interest in the minerals leased.  Now they will have to determine exactly how many mineral acres located within the unit boundary each one owns.  In so doing they will survey each tract and create a survey for the unit as a whole.  They will send you a Division Order for your ownership interest.  You may sign that DO or not but to receive royalty payments you much supply your Social Security number for tax purposes.  It may take some months for all this to happen.  When you receive your first check it will be for production from day one up to the end of the last month of reported production.  It will be the largest check you will see.  Thereafter you will receive a check for a single month of production which runs about 45 days behind.  For example, in mid-June you might receive a check for the full month of April production, however many days are in a particular month.  The monthly checks will be less each month as the well production declines.  At some point the unit operator, Goodrich or a successor, may choose to drill additional wells called Alternate Unit Wells.  A TMS unit with good rock will probably get multiple wells over time as economics dictate.

Permalink Reply by tc on November 24, 2014 at 12:26

Skip - off topic, but when it comes to paying taxes on royalties, do you pay the year you get the check, or the year that the oil started flowing.  For this well, they won't get royalty checks until 2015, but Goodrich could have sold some of the oil that created the royalties in 2014.

Permalink Reply by Skip Peel - Mineral Consultant on November 24, 2014 at 12:31

Each royalty interest will receive a 1099 for payments made in a calendar year.  For the Verberne well royalty recipients will receive a 1099 in January 2016 for payments made to them in 2015.

Permalink Reply by Judy Smith on November 25, 2014 at 12:59

Skip, if you should happen about the production of this well.Please let me know.  Thank you!

Permalink Reply by Skip Peel - Mineral Consultant on November 25, 2014 at 13:14

Judy, patience.  Goodrich will announce the well results when they are ready to do so.  Before that moment no one outside of Goodrich will know.  When Goodrich makes that announcement it will be in a press release or corporate presentation and it won't take long before some GHS member posts it to the website.

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