1st Royalty check received - quesstions raised

Division Orders
1

I just received my first royalty check on Texas production and accessed the statement on-line - 334 pages. Reviewing this has raised some questions - all help appreciated.

1- Production taxes, environment taxes and transportation charges are deducted. Is this normal practice on a non-participating overriding royalty interest?

2 - Are there particular items that one should review on the statement?

3 - How long should one retain a copy of each statement?

4 - Some of the groups of lines (relating to a day?) show no revenue but taxes deducted - is this normal?

5 - Should each well be listed individually?

2

  1. Taxes will be taken out one way or another. The post production charges are very common in TX unless you forbid them in your lease. The NPRI original document would also determine the answer to your question.

  2. The most important number on the your statement is the royalty decimal amount and to make sure that it matches your records and is correct.

  3. Per my accountant’s request (or the newest IRS rules) I save my statements for seven years. You can save them digitally if you don’t want to save in paper form.

  4. Not sure about this question. Normally only monthly totals are shown.

  5. Texas reports by meter, so multiple ways may be on a meter.

3

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