Does anyone know how the infill well system is doing around section 1-11N8W? M_Barnes helped me identify them previously, thanks again! This is what she stated the names are.. Camino has four permits in those sections. HMB 1108-1-212-132WXH, 3MXH, 4MXH, 5MXH. #4 & 5.
We own a 1% ORRI on a good portion of one of these sections with the common source supply. (First)Payment is supposed to be scheduled for late this month. Camino won’t divulge anything.
Any information is appreciated!
Completion reports are listed on the OCC well records site. First production is listed on the Oklahoma Tax site. Do you need a link?
Yes please M_Barnes, and thank you again!
Thank you so much. I was able to find production reports up until July from April that is helpful! My next question is I own just over a 1% ORRI on 345NMA in Section 1. Those wells are a multi-unit common source supply infill well system and each are allocated 33% to section 1. Is there an easy formula to determine if your, for example, total production was $100 in sales for a month how much could I (roughly) expect to see that month?
I was given this but it doesn’t make sense: Your royalty will be based upon your % interest interest in Sec. 1 x 33% x your royalty % interest.
Does that look right? Can you simplify that?
ORRI (Over-Riding Royalty Interests) are taken out of the working interest portion of the well. They are usually not subject to post production costs in OK. They are often given to a geologist or a landman for putting the deal together. So for every dollar that the operator makes in sales, you get a portion. The ORRI is tied to an original agreement. The wells above extend across three sections, with about 33% of the total length in your section 1, so you would get 1% of ~33% of the sales for each of the wells. The decimal value on the statement may be slightly different for each well since they have different lengths. There may be a royalty term in there from the original lease. Once you get the statement, you can back calculate the royalty. Or call the division order analyst and have them give you the exact equation that they used. Ask for a copy of the original ORRI document if you do not have it. You need it for your files.
The first checks that you receive will be the largest since they are for multiple wells for multiple months of first production. The next checks will be for monthly amounts and much smaller Be aware that the amount may bump you into a higher tax category that first year. Our family puts aside enough to pay the first year’s taxes and the second year at the same amount from that first couple of checks. We put it where it will earn interest and we won’t spend it. The IRS frequently requires quarterly payments for that second year based upon the previous year’s tax amount-even though the well(s) decline in volume and royalties that second year. Then we follow our ancestor’s advice-”spend some, share some, save some”. The royalties will naturally decline as the wells volumes decline, but they can last for many years. We invest in other instruments that will make dividends and earn over time.
