Have a section that had a permit to drill issued in January and expired in July (Section 4 16n 15W). Also received notices on Horizontal Well units for adjacent sections 9 and 16 that I’ve also leased out. When they have a multi unit horizontal well do they have to have permits for those sections as well and would that extend their permit beyond expiration date? Would like to have an idea on when it would start producing royalties and rough idea of amount of royalties?
The permit lists the surface location and the bottom hole location. Permits can be renewed. Two section multi-unit wells take about four-five months to drill and complete. In general, you will receive a division order about five months after first sales. By statute, the operator has to pay you by six months after first sales.
You can track the status of the well on the OCC website. Search by the surface location.
http://imaging.occeweb.com/imaging/OGWellRecords.aspx
You can track the production of a well on the Ok Tax Site. https://www2.oktax.onenet.net/GrossProduction/gp_PublicSearchPUNbyLegal.php May have to search by bottom hole location sometimes.
The amount of royalties is determined by the amount of gas and amount of oil produced and the price of those commodities. Your Division Order will have a decimal amount. The equation is: net acres/spacing acres x royalty x % perforations in your section. That decimal is your net. The check stub will show the gross production and then your net amount. The amount will vary from month to month with prices. Horizontal wells generally start out very high and drop off quickly and then potentially last for decades at low rates. The first check you get will be for six months, so don’t be surprised that the second one is lower.