Have You Had Royalty Payments Suspended In The Last 18 Months?

I am interested in hearing from members that have had their royalty payments suspended.  I am particularly interested in knowing the company that pays your royalty and the company, if different, that operates the well(s) in your unit.  Was your well sold to a successor company in the last 18 or so months?

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Permalink Reply by Paul Vallhonrat on November 17, 2017 at 8:50
Chesapeake operated well Slattery 22-16-14 H-1. Paid for by Chesapeake and Enduro. We were in suspense in June 2017 with Chesapeake, but not Enduro,because we were suddenly $9000 in arrears. At the same time a new CLU in section 14 was communicating with the Slattery well and really increased production. Additionally, Enduro pays about $.35/mcf more every month. This is in the process of being addressed.
Permalink Reply by Skip Peel - Mineral Consultant on November 17, 2017 at 9:12

Thanks, paul.  I would appreciate you letting us know how Chesapeake responds to your inquiry.  Based on your royalty income prior to suspension, approximately how long a period of time would $9,000 represent?  There appears to be a connection between suspension of royalty and new CUL wells.

Permalink Reply by Paul Vallhonrat on November 17, 2017 at 9:24
Skip, because the CUL well began paying the next month, we were out of suspense after one month. The accounting makes no sense to me and that is part of what we are trying to figure out. Chesapeake is really good about creating a decimal interest to back in the amount they think we are owed. I have been unable to reconcile this on my own.
Permalink Reply by Skip Peel - Mineral Consultant on November 17, 2017 at 11:00

An original unit well is often shut in during the completion operations for a nearby off set well, in this case the HA RA SUR;ADBN 27&22-16-14 HC.  The unit well may have been used for microseismic during the frac job for the 27&22 or it may have been simply shut in to protect from frac communication.  If a new well fracks into the same rock from which the earlier well is producing that can have a negative effect going forward for the older well.  Your unit well shows very low production for the month that the 27&22 was undergoing completion operations.

Permalink Reply by Skip Peel - Mineral Consultant on November 18, 2017 at 6:11

I am particularly interested in hearing form mineral lessors with six or more months of suspended payments and whether they may have received an explanation from the company paying them.  Those who may not wish to post in an open discussion may do so on my personal page which is set to private.  Just click on my name in blue wherever you find it and you will be connected to my page.  I limit access to my "friends" so "friend me" and you will have access.

Permalink Reply by Gary Manford on November 20, 2017 at 7:05

We experienced a very similar situation with Continental Resources on the Skelton well in Garvin County, OK. We're still trying to make heads or tails out of their accounting. We were on suspense for about 6 months or more. 

We've also had about 15 other companies put us in suspense after the bought wells from other companies, a transition period. 

Permalink Reply by Skip Peel - Mineral Consultant on November 20, 2017 at 8:02

Seems the problem is not limited to Louisiana, thanks Gary.  If what I think has happened, this could be an issue in a number of unconventional basins.

Permalink Reply by Steve P on November 18, 2017 at 17:36
okay, long story. Well drilled and completed in 2010. royalties commenced timely. two years later, a new survey. turns out, section is about 1% smaller. According to CHK, my family had been overpaid about 25%. slightly more complicated, but only slightly. Four years and two demand letters later, still in suspense.

No doubt in my mind, CHK is just sitting on our money waiting to see if we will sue.
Permalink Reply by Skip Peel - Mineral Consultant on November 19, 2017 at 2:59

I suspect that you are correct.  Thanks, Steve.

Permalink Reply by M B Gilster on November 19, 2017 at 3:57
Skip I’m short on time this AM but have a somewhat sim. experience to Steve’s above.

I’ll post more info. on my sit. later today/Monday but suffice to say thx for creating this very relevant topic.
Permalink Reply by Skip Peel - Mineral Consultant on November 19, 2017 at 4:01

Thanks, MB.  I encourage GHS members who know someone that has experienced royalty payments placed in suspense to introduce them to the website and add their response in this discussion thread.

Permalink Reply by Greg Whitson on November 19, 2017 at 6:31



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