Need some help figuring all this out.
As far as I know, 23-18N-2W has been pooled already. Did not know how to respond when I got the paperwork from the courts in October 2013. I have not responded yet and don't really know how to...so I left it alone thinking the court would choose the best option for me. Still do not know what is going on at this point and what I should do.
Got a Notice of Hearing for Pooling in October 2013 for 24-18N-2W, but never got anything after that. Just got a Division Order in the mail from Devon with a W-9. In the paperwork, it lists all of the heirs (mineral interests were transferred to us from my deceased father), their lease number and royalty. Mine says (FP) under lease number and 1/8 under Lease Royalty. The rest of my family signed a lease with Devon and their Royalty amount shows 3/16.
Anyhow, I wanted the option of no cash bonus and 1/4 for both....or participation in the well and ownership (which was offered in the 23-18N-2W pooling). Devon never offered this to me so I never signed a lease. Again, I never got a pooling order from 24-18N-2W.
My question is, what do I do now? Did I screw myself for not responding? Can I send a letter to Devon stating what I want for both sections? Any advice would be greatly appreciated. Thanks!
It takes a long time for production results to prompt payment. One year for me.
email Tammy and see what she advises:
McVey, Tammy [Tammy.McVey@dvn.com]
Senior Staff Division Order Analyst
Devon Energy Production Company, LP
Gordon,
If it took 1 year for you to get a check, you need to see when the first production was sold, they have 6 months from that date to pay you if your titles clear. If they don't pay you, then you can write an ask for 12 % interest. It's 6% if the title isn't clear.
IrishCal,
According to OCC records, 23-18N-2w had a well spud filed Sept 26 and it was approved for the Woodford H. The well may have been drilled 3-6-14.
When you received the notices, you have to reply or OCC will decide for you. You are lucky that you didn't get involved in participation of the well. Unless you have lots of money and understand how that works, do not get involved. Once they start the well, if they get into a probably, you may need to get another 1/4 million to get the well finished or sometimes even more than that. At this point, unless you can prove you didn't get a notices, you are stuck with 1/8 and no bonus. Was you every offered a bonus and 3/16 by a land man? That was the time you should have tried to get more in bonuses or zero bonus and 1/4. Not now.
I got offers from Devon and others in the past, but I was under the impression to hold out until the pooling. I got a notice of hearing from the courts for pooling on 24-18N-2W back in October, but never an order.
On 23-18N-2W, I got an order from the courts in October but nothing else since...from anyone.
Should I try writing a letter? If so, to whom? The courts or Devon? That is why I did not send anything in the past. Not sure who to send it o and the address. The court docs have multiple addresses.
I just sent an email to Devon requesting no cash bonus and 1/4th royalty on both sections. I wrote in the email to the royalty department that I have not received a Pooling Order, so I could not respond in the time required by the OCC.
I CCed the division department so it went to two different departments. I hope this is enough. I feel like this whole thing is a pointless and a nightmare. This is because my amount of minerals owned is really nothing in 24-18N-2W. It is 1/9 (8.888889) acre mineral interest split 11 ways (mine being 0.317460 net acres of minerals owned). I think I own about the same in Section 23-18N-2W.
IrishCal, didn't you ever receive the bonus check from the pooling?
No bonus check, no Pooling order...I don't know. However, for Section 24-18N-2W, Devon sends me a Division Order in the mail with a statement showing my interest and a W-9 (that magically got here). In the paperwork, it lists all of the heirs (mineral interests were transferred to us from my deceased father), their lease number and royalty. Mine says (FP) under lease number and 1/8 under Lease Royalty. The rest of my family signed a lease with Devon and their Royalty amount shows 3/16.
I have got nothing from Devon on Section 23-18N-2W since receiving a Notice of Hearing last October.
IrishCal,
First, you were taking a change that OCC would give you a better offer, sometimes they do, but you gave up your right and you can no longer put exhibit in your lease, like no transportation charges, etc. First mistake. When the land man/Devon offered you a lease, that was the point where you should have ask for the 25% if that is what you wanted, probably won't have got it, but you could of ask. Then you received a notices from OCC with a time and date for a hearing. If you thought you should have gotten 25%, that is when you should have went to OK City OCC court. So, you were notified. Once OCC rules then it's an order, but you do not receive anything at that time. This is when the 1/8 was set because you didn't do anything about it. I don't know who told you to wait, but they didn't understand how this works. I would be surprised if Devon will do anything at this point, they will just say you should of called sooner and learn about how leasing works. At the small amount of acreage you have it probably won't be but a few dollars, but I do hope you learned something. Now you have lost a bonus and 3/16, instead you only have 1/8.
If you owner minerals, a person needs to join things like NARO, go to meeting to learn about how everything works. Their are several good cheap books, like "Look Before you Lease". Lots of on-line search material to read and help a person. People need to get educated before they lease and if they don't understand what they are doing go to a good oil/gas attorney and pay a few hundred dollars.
Just found this info online (although this is for Ohio, the terms I have sound the same):
"The royalties awarded to an unleased mineral owner forced into a unit were generous
In each of the approved unitization orders I reviewed, unleased mineral owners were to receive a “monthly cash payment equal to a one-eighth (1/8) landowner royalty interest calculated on gross proceeds.” Of course, this 1/8 royalty is allocated according to how much land the unleased mineral owner was contributing to the drilling unit. This 12.5% royalty is significantly lower that what Utica producers are offering under a new lease. However, in addition to the 1/8 royalty, the unleased mineral owner will receive a “monthly cash payment equal to a seven-eighths (7/8) share of the net proceeds,” again, based on how much land the unleased mineral owner was contributing to the drilling unit. This 7/8 royalty does not become due, however, until the producer has recovered between 100% and 200% of the cost of drilling, testing, completing, and producing the initial well. The chief of the ODNR reviews each of these matters on a case by case basis and the orders issued vary somewhat. Landowners affected by the orders, unlike landowners who signed leases, did not receive any sort of cash bonus or signing payment.
Consequences to landowners
To me, there are a few benefits to being forced into a drilling unit. The unleased mineral owners receives a more favorable total royalty than a lease would typically provide (an initial 1/8th plus a 7/8ths working interest after pay-back). Moreover, the chief’s orders reviewed speak to royalties based on “gross proceeds” and no provision is made for deductions therefrom".
Reference: http://johnsonandjohnsonohio.com/forced-pooling-trends-benefits-and-detriments/
IrishCal,
You did get a Division Order and W-9 from Devon. That shows there is a producing well that you are part of.
PLEASE, make a note of the owner #, Well name for future records. They are ready to pay you for your % of acres at 1/8........
Old saying goes, you should of signed a lease when they called, then you would have gotten a bonus plus 3/16. You gambled you would get more and lost. Now, start studying and get smarter.
IrishCal,
Ohio laws do not apply to Oklahoma laws. You can call OCC, 405-521-2613 and ask them what you were awarded. If you still have the pooling order/OCC hearing date or the legal or well name, they should be able to look it up for you. Then you will know if you were awarded a bonus and haven't got it. They also can tell you if their is anything you can do.
I don't know if I would have gotten more if we excepted their offer. The 3/16th they offered was on net proceeded not gross. The 1/8th is based on gross plus a 7/8ths working interest after pay-back of the well. Not so bad.
I just noticed the decimal interest is wrong on the division order after I calculated it. Also, what is "BL"? Does anyone know? Thanks again!
Virginia Pflum said:
IrishCal,
You did get a Division Order and W-9 from Devon. That shows there is a producing well that you are part of.
PLEASE, make a note of the owner #, Well name for future records. They are ready to pay you for your % of acres at 1/8........
Old saying goes, you should of signed a lease when they called, then you would have gotten a bonus plus 3/16. You gambled you would get more and lost. Now, start studying and get smarter.
Could be BBL instead of BL? BBL means a stock tank barrel which is 42 gals which is what a person is paid on.
This site has a good glossary of oil/gas terms.
http://www.conocophillips.com/investor-relations/fact-sheet-financial-data/Documents/PDF/SMID_392-COP-Glossary-of-Terms-External-FINAL-5202013.pdfit
Sounds like you got W I instead of a bonus, that maybe good if the well is really good.
Reading over the pooling order for Section 24-18N-2W, this is what I found:
"The no cash bonus with a normal 1/8 royalty, plus an additional 1/8 override, is a fair, reasonable, and equitable bonus to be paid unto each owner who elects not to participate in said well or wells if hereinafter authorized to be drilled on the drilling and spacing unit by paying such owner's proportionate part of the cost thereof; such cash bonus plus overriding or excess royalty, when paid as set out in this Order, is satisfaction in full for all rights and interests of such owner in the unit covered hereby as defined in 52 O.S., Section 87.1(e)."
So, does this mean I did get the no cash bonus with a 1/4 royalty I initially wanted? Except 1/8th goes to paying an interest in the well and the remaining 1/8th is paid to me?
Also, the division order decimal interest is different than the number I come up with. They have .00018601 on the division order. I have mineral rights for 0.317460 net acres out of 640 gross acres, with 1/8th royalty. I am getting .00006204. My number is less than what they have on the division order...which is good...but I am confused how they came up with this.
Thanks for everyone's help on this!
IrishCal,
First, you will be getting 1/8 royalty till the well is paid for, then you will get another % of ORRI. This means you will not be paying for anything, but you will taken a share of the profit. Let's say, you were the leasing company and you paid the bonus but didn't take any money up front. But, you took ORRI for your payment, so once the well is paid for, you get a % of the profit. Working Interest (WI) are people who paid to drill the well and may have to keep paying to keep it cleaned out, etc.
I can't answer the question on the decimal interest. First, you are only getting 1/8 of the total 640 or whatever the spacing is. The oil company is getting 7/8. So, you take the 1/8 of the total and divide by the number of Acres you have, that is your decimal point. If you think it should be different, call the company and ask how they figured it.