Division Orders from a new Operator in Spraberry


#1

My family trust has a Working Interest in several sections in the Spraberry area and has been receiving royalty payments from Prime Oil for at least 25 years in two sections. We received new Division Orders from Parsley Energy Operations for 2 of these properties in Sec 24, Blk 40 and they have taken over as the new Operator for some of these lease properties previously operated by Prime. Parsley has been sending us several expense invoices the past few months and a couple of revenue checks for the 2 properties shown in their Division Orders that also includes 3 other properties not included in their new Division Orders that are located in Sec 14. All 5 of the properties were previously operated by Prime Oil. Our previous Division Orders with Prime Oil included all 5 properties plus others. So far the expense invoices that we’ve received far exceed the two revenue checks. I’m concerned that since we don’t have Division Orders for the other 3 properties that we shouldn’t be billed for expenses or receive revenue from these 3 additional properties. I have tried calling Parsley, left a detailed phone message, emailed them, and sent a registered letter that was signed received by the company. Does anyone have any experience dealing with Parsley Energy? So far it appears that our Working Interest in these properties is going to be a lost. Thanks!


#2

Mr. Harris,

That certainly is a tough boat to be in. Unfortunately, I do not know anyone there. Are these tracts pooled together, or do you by chance have interest in those other tracts as well? My suspicion is they may be coming in behind old producing verticals and drilling horizontals, which is generally very good news, unless you are a working interest owner with a huge AFE. I think your best options are to keep blowing up your various phones, email, etc. with them while you look for an attorney who can assist you. Should y’all entertain selling the working interest, I wouldn’t mind having the opportunity on behalf of the company I work with to look at what y’all have. Best Regards, Mike


#3

Thanks for your comments Michael. All of the tracts are not pooled together, and we still get royalties from other operators. I finally found a contact name and email address and he replied to me so at least I have them checking on information for me. We may be interested in selling our family interest in Upton County at some point since my siblings and myself are all close to 70 and I don’t think we’d want to rework the trust to past it on to our children. My father originally purchased an overriding royalty interest in Upton County in 1957 for 3 sections containing 1920 acres. Thanks again, Al


#4

Al,

That is excellent sir! They should be able to let you know what is going on. Your contact seems to be quick to respond.

Let me know if you ever need anything.

Best Regards, Mike