Linda, My CPA told me I could deduct my attorney fees and landman fees that I had trying to get this all straightened out. Also hotel, mileage etc… For my trips to Stephens, Grady and Garvin county courthouses. I could NOT deduct anything for probate expences though. I’m not set up as a business.
Linda, would love to meet you someday! You are quite the character. Love following this Forum.
Be sure and send it by certified return receipt mail and put a self-addressed stamped envelope and request a copy or original of the filed request. Then you have a paper trail
Am I right that a couple can have a partnership business with your royalty (Oil and Gas Investment Company or ?) and therefore deduct all these fees, travel down to the diggins to find out about your wells as far as gas and wear and tear on your car, etc. I know we can with our corporation but before we incorporated we had a partnership business (with our supply company) and was wondering if some of you didn’t want to spend the money to incorporate if that might be an option ?? (or crazy thinking?) I believe if you want to take off home office expense (phones, computers, etc.) it has to be separated from the rest of the house as only an office and it has to have it’s own private bathroom, right? I heard a couple of years ago that they were really cracking down on what people could and couldn’t call a home office so a body would probably need to ask your accountant.
When we first sold our supply business we made an office out of one of our storage buildings on our acre where our house is and I had two electric typewriters and two filing cabinets full of paperwork and only went out occasionally (which was not enough). Hubby had his workshop in the same building. We found one day that the field mice or probably rats had shredded the papers from the file cabinets and made their nest in the electric typewriters. They also had chewed the wires off of the typewriters so they were trashed. Perils of living in the country, I guess. Hubby also had his work shop in the same building. A few years after that the building exploded because Mobil had a gas line that ran under it which we didn’t know about at the time and that line got a dime size hole in it and caused the explosion! Praise the Lord we weren’t in it as my husband had been in his workshop the night before! So, choose the spot for that home office carefully is what I am saying. If you live in Okla. you can call OKIEONE and they will have all the gas, telephone, electric, etc. companies come out and mark where all the lines are. Don’t know why I’m rambling like this other than I just don’t want people to make the same mistake we did. Nuf Said! (Sorry I should have put that on a Chit Chat line like Rick started on the Stephens Co. forum).
Karla…sounds good to me. If you ever come this way give me a hollar. Probably be best if you send me a friend request and contact on the private line if that comes about. I’m not nearly as cleaver as people think I am (usually I just repeat what I learn from others) so I would hope you aren’t disappointed at the real me.
Yep, Jennifer, my guy told me the same thing except for the probate as we didn’t have any probate expense to deal with. Even little things like the price of copies the county clerks office make for you of what you find in the county records is deductible. I believe the newspaper subscriptions might also fit that catagory. We have some accountants and CPA on some of these forums ( and some just really really smart people) so if I’m giving some wrong advice please correct me. We just had our taxes figured and came out pretty well on personal and corporate too. Hope I can say that at the end of this year!
Rick: You mentioned Garvin 26-2N-3W. I have 26-3N 3W,a ranch Property held by Williams years back. Right below it I have 35-3N-3W in 3 places, 90 total acres. It was once leased by Anadarko and had interests in Seminole as well. No word about leasing any of this for years. Any suggestions? I am registered at the clerks office in Garvin. Thanks!
Linda and Martha, Thank you for your information. Martha, I will get to together with you when I can figure out how to friend you on Facebook.
Do I need any info from you? I do have a Facebook account.
Don
Don, friend me on this forum. Go up to the top right and find the friends button and ask me. I will reply and then we can communicate offline. Then all the info stays in the same place. Facebook has privacy issues.
Pat,
Your locations are 5&6 miles North of that one. 26-2N-3W & 35-2N-3W both appear to have production on most of it. Is your ranch outside of the production area or are you being paid on it?
If you being paid on it, you may be held by production and will not be able to enter into a new lease. The lease agreement will be negotiated with the current lessor.
Rick, thanks for asking: NW/4 SW/4 SW/4 26 3N 3R. It is the smallest holding I have in OK so I would not be surprised if it is hard to notice.
PC
What is the entire legal description? Example NW4 SW4, NE4 NE4 SW4 of 26…
There has not been much activity in 3N-3W. The maps I have seen appear to have you very close to the edge of the play, and possibly just outside of it.
Generally speaking, the leasing will come to you. I only see 1 lease in the last 6 months and it appears that may have been made to get a multisection deal.
Also in my previous statement
"I only see 1 lease in the last 6 months and it appears that may have been made to get a multisection deal. "
Should be:
I only see 1 lease in the last 6 months in those or the surrounding sections and it appears that may have been made to get a multisection deal.
Not my ranch. Like I said, the original lease came from George L. Rose, passed to my mother L. Rose, and then to me. No lease
Pat,
From that description, you should be seeing income from:
The Tomlinson A 2-26
http://imaging.occeweb.com/OG/Well%20Records/00000006/OCC_OG_3BQQ4I…
The Tomlinson A 2-26
http://imaging.occeweb.com/OG/Well%20Records/00000001/OCC_OG_2VSFDR…
SHERIDAN PRODUCTION CO LLC is the operator
A question for knowlegable Forum veterans. I have a very small interest in Smith 1-18H (18,3,4). Predictably, the royalty checks are becoming smaller each month. However, the offers to buy my interests has hit an all time high of $9000 per net acre. I won’t sell – no matter the offer – it’s a “family thing.” But, why would anyone offer that much?
Brenda, the most likely scenario is more wells being drilled in the section.
That makes sense, Michael – in the long run. Since the royalty payments are dwindling, my assumption is I won’t be making much from this well in the next several years. Is there ever a 2nd fracturing at the same site?
Brenda, the short answer is because it is worth much more than that and someone wants to make an easy profit.
Brenda, to put Hutch’s response in an even brighter light, I used M Barnes calculation spreadsheet to understand the value of a single net mineral acre (nma) in these horizontal wells. I took the sheet and calculated based on 500 BOPD and 1000 MCFD and 1 NMA around today’s oil and gas rates returns the following w/o any bonus:
----------- 4 year total return -----------
RI 1-well 2-wells 6-wells 9-wells 12-wells
3/16 $10,691 $21,383 $64,151 $96,226 $128,302
1/5 $11,404 $22,809 $68,428 $102,642 $136,856
1/4 $14,255 $28,511 $85,535 $128,302 $171,070
So, a $9000 investment yields an 18% return ($10,691) over 4 years in the case of a 3/16 lease and 1 well. If you compare to bank interest rates, that isn’t bad, although it is worse than the stock market. But they are betting on multiple wells and then the returns on their $9,000 investment become pretty good.
Hutch, I did a little dance of joy for you all when I heard about all those new wells going into your section! Please wave to us all when driving by in the Brinks truck and cross your fingers that is the first of many sections to get all those holes poked in it!