Not to get the cart before the horse, but there is at least some data saying that all the leasing and drilling activity in Reeves County is bearing fruit.
So, let's say that you have leased your property, the lessee drills, completes a producer, and then what? Obviously there needs to be a way to get the production to market (pipeline). Given that problem is also solved (well, I said "bluebird topic"), then what?
1. You as lessor sign a division order specifying your percent interest (yes, it is already in the lease contract, but the division order is customary). The division order also specifies your taxpayer id or Social Security #. I'm pretty sure that this step is correctly stated.
2. I presume that, once the division order has been signed, a royalty check will eventually show up in your mailbox. Any way to predict when? Any way to predict how much?
3. Somewhere on another discussion topic in this forum, it was mentioned that a vertical well costs about $7.5M. When does the lessee recover that money? Does it strictly come out of his working interest (his 75% or 80% as stated in the lease contract)? Or can he also withhold part of your 20% to 25% until the cost of drilling the well is recovered? If he can withhold costs from your working interest, how much can he withhold?
4. Any way to manage or forecast the revenue stream from the royalty checks once things settle down? If your first royalty check is for, say, $1000, can you assume $1000 a month forever, or for ten years, or must you assume that you may not see another check at all? This is kind of important from a tax management standpoint.
5. Once production begins from a given well, does it continue more or less constantly, or can the lessee 'shut the well down' and await better market conditions, for example?
6. Are there other issues, or steps, that I don't know about or haven't mentioned?
As a side comment, this forum, and particularly this Reeves County discussion group, has been greatly helpful as I try to understand this strange new world (to me, at least). Thanks to all on the forum for their insights, past and future.