Royalty Check

  1. We received our first royalty check for the Longleaf well in Caddo Parish, payable by Chesapeake. We never signed a lease because we were not aware of a lease offer.   Chesapeake said the land was leased in 2018 and we should have received lease papers by mail.  Is there any way we can find out more about this well? 

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 3, 2023 at 10:26

Cindy, what you received is not a royalty payment.  It is a production payment.  This indicates that your Longleaf well, drilled in April 2011, has recovered its cost to drill and complete.  In other words, the well has "paid out"  I'll put a link to the well file below.  Going forward you will receive payment on your tract's proportion of monthly unit production less Lease Operating Expense (LOE).  Unleased mineral owners have their proportional share of production withheld by the well operator until payout.  The well is old and the current production is low but congratulations on receiving some compensation as many early wells have not paid out and many never will.

https://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellinfo...

Permalink Reply by Cindy R on March 3, 2023 at 10:39
Skip Peel, I wonder why I am considered an unleased mineral owner? I don’t quite understand that. I have other property in Desoto Parish but our family signed a mineral lease for that property. Thank you for your detailed reply.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 3, 2023 at 10:46

If your minerals under this well (drilling unit) are not burdened by a lease then you are an unleased mineral owner and as such your relationship with the well operator is governed by the Louisiana Mineral Code.  Unleased mineral owners get paid their proportional share of well production once the well has paid out.  Unleased mineral owners are "force pooled" into drilling units by Louisiana law.  In DeSoto, where you have a lease, your compensation is a royalty payment as stated in that lease.

Permalink Reply by Cindy R on March 3, 2023 at 11:04

Thank you! 


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 3, 2023 at 11:14

You're welcome.  Your unit will get three to four additional wells in the future.

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