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Eagle Ford Shale Minerals Question

I am involved with mineral leases for the first time with property in Karnes, Wilson and Atascosa counties. The first well was supposedly completed in late Dec. How long should it take to show production info on the TRRC site and when do you normally expect to see the first check? Thanks for any feedback.

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Permalink Reply by Cliff Williams on February 1, 2012 at 11:34pm

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time.  If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline.  If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March.  A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

Permalink Reply by Richard Skinner on February 2, 2012 at 10:20am

Thank you Mr. Williams. I think they finished drilling but I am not sure how long it takes them to move it to production as you noted below. It is oil and leased through EOG. We do not really have any communications link and about they only way we learn anything is through a landman that sometimes provides info such as if one of our units is on or off the drilling schedule. We expect a number of additional wells on different tracts that have been pooled and this is is the first experience. We have not received any other notices beyond when we signed off on some pooling agreements and our % interest was included there as I recall. Beyond the landman who has limited ability to really share any details, should we be able to gather better insight from EOG?

Thanks again - Rick

Cliff Williams said:

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time.  If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline.  If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March.  A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

Permalink Reply by Cliff Williams on February 2, 2012 at 10:29am

The company will not share any of the drilling information nor will they share their drilling schedule.  You don't have many options without having someone on the inside unfortunately.  And, as you have probably surmised, the landman is not plugged into the corporate "operations" side of the business.  It is typically all hearsay and grapevine information.

 

Cliff

 

 


 
Richard Skinner said:

Thank you Mr. Williams. I think they finished drilling but I am not sure how long it takes them to move it to production as you noted below. It is oil and leased through EOG. We do not really have any communications link and about they only way we learn anything is through a landman that sometimes provides info such as if one of our units is on or off the drilling schedule. We expect a number of additional wells on different tracts that have been pooled and this is is the first experience. We have not received any other notices beyond when we signed off on some pooling agreements and our % interest was included there as I recall. Beyond the landman who has limited ability to really share any details, should we be able to gather better insight from EOG?

Thanks again - Rick

Cliff Williams said:

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time.  If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline.  If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March.  A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

Permalink Reply by Richard Skinner on February 2, 2012 at 10:34am

Thank you again! it is trial and error so far.

Permalink Reply by Johnny Cloud on February 4, 2012 at 7:56pm

How do we find out if there is any activity on acreage that that we have a precentage of mineral right on. It is in Karnes Co. Tx at Runge, Tx. We have a lease with Petrohawk and it is now I believe BHP Billiton.  The orginial lease was with Petro-Hunt,LLC

Johnny Cloud

jbcloud@embarqmail.com

Cliff Williams said:

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time.  If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline.  If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March.  A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

Permalink Reply by Cliff Williams on February 4, 2012 at 8:11pm

Mr. Cloud,

  I suggest you go to the Railroad Commission GIS maps and find your area.  There you will find symbols for any wells in the area.  Click on the tab that says to "identify wells" and then look at the associated filings to determine where the unit has been declared for each well.  It is a process that you can use to determine where the units are which is easier than going to the courthouse and doing the research there.

You can contact me on my website and send another e-mail there for additional help. 

Cliff Williams

The Law Office of Cliff Williams

Permalink Reply by mike ryan on February 7, 2012 at 1:08am

Is there a link to these Railroad Commission GIS maps that can be viewed online?

Thanks: Mike Ryan

Permalink Reply by Cliff Williams on February 7, 2012 at 6:38am

Yes, you can google "Texas Railroad GIS" and click on the Map Viewer link.  Try this and see if it works first.

Cliff

Permalink Reply by mike ryan on February 7, 2012 at 8:49am

Thanks!

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