Martha,
It looks like the permit was amended to change it to a Horizontal well. It retains the original expiration date of 10/10/2013. The SHL appears to be very close to the Williams 1H-19 which was completed last year.
Should say
Linda,
This should be just east of the county line and north of Highway 29 in section 19. 17 is going to be another mile east of county line.
Now I have myself confused. lol Do you think the rig is in 18 and is it going across any other section? And is this or not the second Williams well?
Help me Vicki~what well was the rig on that you and I saw on the hill north of the highway and west from the little Church of Christ you went to with you grandparents?
That is the Studdard. SHL in 17 going through and producing from 20 & 29
Lynden, thanks for that map! We get royalties from some of those wells in section 21, nice to actually âseeâ them.
Linda, Bob and Katie do own the surface and I believe I saw their name listed jointly on the list of respondents as mineral owners
Here is a spreadsheet that may help you calculate your options. I have modified one that I found on the forum (in Garvin I think.) Thanks to the original author.
For leasing or force pool options: I input my net acres, estimated royalties, rates, prices, etc. in the yellow boxes. I can compare different options for royalties with or without a bonus. I used a basic decline for the Woodford. It would be different for another reservoir. I put in OK taxes, but not federal, so keep that in mind. The first year doesnât always look so great in comparison, but remember these wells are big in the first year or two and then decline, but can last for 20-30 years. This is only the first four years. Didnât feel like doing the next 16 or so. I also added columns to estimate two wells on the block, six wells, etc. You only get the bonus once. With companies starting to drill many wells on a block if they are working the horizontal plays, it really starts to add up. I am a long term person, so I usually go with a lower bonus and a higher royalty after I run the numbers here.
To answer the âsell or notâ question, I added a sales component and compared what I might make for a one time sales with what I would make after year 1, year 2, etc. Again, this is only for four years, so if you get a huge offer per acre, then one well at four years, may look like a good deal at first glance, but what about ten years out or what if there were two wells, etc. What if they open up new reservoirs or new plays we donât know about now. Once you sell, it is gone. However, if you need cash, then you can sell part and keep part. There is always risk, just trying to keep it as low as possible.
You can play with the spreadsheet to meet your needs. (If I have made a mistake, please let me know, so I can fix it.)
One of you genius web types can post it in the Links for Mineral owners once we figure out that it doesnât have any math errorsâŚonly the first 100 complaints will be read since I keep tweaking thisâŚ
Thanks Barnes. Thatâs an awesome spreadsheet! Now, all I gotta do is learn how to fill in the blanksâŚwow
Here is an example of three sections in Canadian county that have an original Woodford well drilled in each of them back in 2008-2009. This is gas only for the display, but you get the idea. They kept it hush hush for years then speed drilled at the end of 2012 eight more wells in each section. Now there are 9 wells in each section. The first ones have tapered off (also had different fracking stages) and the new ones have come on line. They are trying to get the first ones back on line. See how it flattens out after the first couple of years. A certain company that we shall not name tried to buy the acreage in late 2012. I start my BBQ with their offers. Good thing I didnât sell. Now there are 24 new wells and their declines are similar, but maybe a bit less, to the first three wells.
This is why I made a part of the spreadsheet go to nine wells.
Just fill in the yellow parts. Play with it a little and do comparisons. Might save an original just in case.
Good morning everyone. I just feel a lil restless anticipating that first royalty check from CR. Itâll be my first time receiving such. However, I wanted to send the payment to a corporation fir tax purposes. Is that possible?
GrergoryâŚOur accountant had us put our royalty in our corporation so they would get the checks because we already had the corporation from when we had an Oilfield Supply Business and in fact still have a Safety Business in the Corp. From what I remember it cost us $1000. to incorporate and that was back in 1989 so Iâm sure it would be more now.
I believe he said we should put it in the Corp. because we still had some losses on an investment we had made in the First National Bank at Purcell before the bank went belly up. Those losses could not all be taken off in one year and I believe he said they had to be taken off against capital gains (but all thatâs a little fuzzy now). Then we had some losses on some stock that we had in the corp. name. I also believe we can take off our expenses for going to check on the work on our royalty if we had it in the corp. but I may be wrong and so often am, so best you consult your CPA. When we bought Pâs brotherâs royalty the other day we bought it out of the corp. money and put it in the corp. name. Rick is right about you could be taxed twice if you put it in a corporation because you would be taxed through the corp. and then if you took it out of the corp. to use yourself or pay yourself a salary you would have to pay personal taxes on it again. The thing is that we loaned our corporation the money to buy the royalty so I donât believe we will have to pay taxes on it when they pay it back to us~only on what we get over the original investment. I probably shouldnât have said this much because I certainly donât know much about taxes and I donât want to confuse so anyone knowing anything Iâve said wrong please correct me.
One of the things I didnât like about having our royalty in the Corp. is that deductions for donations to our church were not deductible to a Corp. but donations to schools were allowed so we started a little scholarship fund in the name of our Corp. for a student at Lindsay High School each year. We did that for a few years until we sold the Supply Co. We might start that again when we start getting royalties or check into donating to TUâs Golf program. Again we will have to check with our accountant before we doing anything.
Iâm not an accountant, but I doubt it. And I believe it would cost you more in taxes.
Evidently the entity is owned by you instead of the corp or the check wouldnât be coming to you.
As an individual you have the same tax rules you would have under a LLC or S-Type Corp. A C-Type corp would allow retained earnings at a possible lower tax rate but you would still pay the same when you transferred to you individually by share profits or corp salary. So it would be double taxation in most cases.
And it could be tax evasion in many other schemes. ;^)
Your corporation doesnât pay any taxes???
Yes, it limits the liability for the shareholders just like a C Corporation, but there is no double taxation like a C Corporation.
I established the S Corp in 1991. I am planning to establish a family trust and put all of my assets into the trust, ie house, investment accounts and the stock of the S Corp. Upon the death of both my wife and myself, the trust will be distributed tax free to our sons.
Well, I didnât mess up too bad until the last line on that last statement and that âweâ snuck in there where it didnât belong! Sorry!
You might want an LLC instead of a corp if you are starting fresh. They have slightly different rules. Talk to your CPA and attorney. One good thing is that putting the title to the minerals in the LLC (and the royalties) makes it easier to pass to your heirs. The name of the LLC doesnât change if someone dies. You pass shares or units of the LLC to the heirs and they donât have nearly as much hassle at probate time. You donât have to file all sorts of paperwork in every county where you have minerals for every person who inherits. We are on our fourth generation and the bookkeeping is so much easier. Also helps with tax issues.
M. BarnesâŚDo you know the cost of changing from a âINCâ to a âLLCâ ?