Eagle Ford Shale Minerals Question

I am involved with mineral leases for the first time with property in Karnes, Wilson and Atascosa counties. The first well was supposedly completed in late Dec. How long should it take to show production info on the TRRC site and when do you normally expect to see the first check? Thanks for any feedback.

Thank you Mr. Williams. I think they finished drilling but I am not sure how long it takes them to move it to production as you noted below. It is oil and leased through EOG. We do not really have any communications link and about they only way we learn anything is through a landman that sometimes provides info such as if one of our units is on or off the drilling schedule. We expect a number of additional wells on different tracts that have been pooled and this is is the first experience. We have not received any other notices beyond when we signed off on some pooling agreements and our % interest was included there as I recall. Beyond the landman who has limited ability to really share any details, should we be able to gather better insight from EOG?

Thanks again - Rick

Cliff Williams said:

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time. If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline. If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March. A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

Thank you again! it is trial and error so far.

How do we find out if there is any activity on acreage that that we have a precentage of mineral right on. It is in Karnes Co. Tx at Runge, Tx. We have a lease with Petrohawk and it is now I believe BHP Billiton. The orginial lease was with Petro-Hunt,LLC

Johnny Cloud

jbcloud@embarqmail.com

Cliff Williams said:

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time. If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline. If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March. A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

Is there a link to these Railroad Commission GIS maps that can be viewed online?

Thanks: Mike Ryan

Thanks!



Johnny Cloud said:

How do we find out if there is any activity on acreage that that we have a precentage of mineral right on. It is in Karnes Co. Tx at Runge, Tx. We have a lease with Petrohawk and it is now I believe BHP Billiton. The orginial lease was with Petro-Hunt,LLC

Johnny Cloud

jbcloud@embarqmail.com

Cliff Williams said:

Mr. Skinner,

If the well was completed in December the considerations are as follows:

  1. A question is whether the operator completed drilling the well or actually completed everything required to begin production. The latter sometimes takes more time. If the well is in production; then,
  2. If you are in the "gas window" the well must be tied-in to the natural gas pipeline. If you are in the oil window then it just goes to the tanks.
  3. Hopefully, the division order title opinion has been completed and you should have received a copy of the "Division Order" or the calculated percentage of the production proceeds that you will receive; if so,
  4. The oil or gas produced in January will go into the tanks and the gatherer will calculate in February and the operator will have the January production payments sent to the landowners generally sometime in March. A two month lag is not uncommon.

Production info on the Tx RRC site can lag by several months and there is no set time they update their information making the RRC somewhat unreliable for monitoring the production and payments.

Typically, when I edit a lease for a landowner and represent a client and respond to oil and gas company I enter language into the oil and gas lease that states that you are entitled to the title opinion, that you have audit privileges and they have a 90 day window from initial production to pay you your royalty without the oil company incurring a penalty.

Feel free to contact me if you have further concerns or I can help you in any way.

Cliff Williams

We are being told that the division orders are laying on an attorneys desk and just not being processed. How do we speed that up. The keep saying next week every time we call.

I'm in two units operated by EOG just north of the intersection of Hwy 123 and CR 887 near the Karnes/Wilson County line. Production for both units began July 2013. EOG is still awaiting receipt of Division Order Title Opinions. Please keep in mind that both of these units were "super-sized". One unit has approx. 1300 acres with 85 tracts.

Mark B.

I'm still chuckling about the guy who wanted to know how to "speed up" an attorney. I once negotiated a lease with a lady for about $110,000 bonus consideration. She was literally about to sign, had the pen in the air, when she said, "You know, I better have a lawyer look at this." So she sent the Lease to her attorney, but by the time he had reviewed it, almost three months had passed. By that time, our client had drilled a dry hole nearby and gotten disappointing well logs from another well nearby, so they abandoned leasing activities in that area. She called me up and said that she was ready to sign, and I had to tell her we were no longer interested. She got irate and said that she was planning to quit her job and with her husband build a home to retire in.

Good story Pete. “Time is of the essence”.