Legal order about Sections 3 & 10-4N-6W common sources of supply

Oklahoma Mineral Rights Grady County, OK
1

I’ve received another copy related to order #678957. It relates to four wells under the North Cheyenne name (North Cheyenne 3-10x3H and 4, 5 and 6). Apparently well 3 drilled into the Hunton formation. I’m not sure what this really means.

Also, my royalties from this section have been much lower than usual - 10-25% of normal revenue. Are these wells operating and if so, why aren’t I receiving royalties from them (I don’t see those wells listed on the breakdown for my checks).

Thanks for any help you can provide.

2

George_E_McCain, WOW!!! You have some super nice new wells! Most were completed in January, so you should see them listed soon on the breakdowns with your checks. Part of the lateral on well 3 penetrated the Hunton formation. That is why it is listed. I didn’t see a completion report yet for well 4, but you can add wells 7 & 8 that carry the North Cheyenne name. Again, super nice wells! Congrats!

3

Thanks, Don. I figure this is good news, but I haven’t seen the royalties from those wells yet, so I’m not completely sure when the new wells will start producing and when that will affect my checks.

Does the fact that one of the wells penetrated the Hunton formation mean anything will change for the folks with mineral rights to those sections?

4

George_E_McCain, most if not all horizontal wells include the formations above and below the target formation, so I believe nothing changes. The Hunton formation is right below the Woodford formation.

5

Here’s how those formations “stack” up in Scoop.

OK-fig-2
OK-fig-2960×720 115 KB

6

Thanks for the chart. It’s very helpful.

Edward

7

Thanks, Don. Yes, we are excited about the new wells. I’m looking at the Oklahoma Tax Commission site and it indicates that most of those wells are producing natural gas. I’m wondering if they are also going to produce oil. Do those kind of wells produce oil, especially when they are first drilled? I still haven’t seen any revenue from those new wells even though they have been producing since late last year in some cases.

8

Yes, they are producing oil… some operators are not very diligent in filing their reports. Not sure what is up with that.

9

Going back up to the original question, you won’t see royalty checks on the new wells until about six months after first sales. Patience. And you might want to talk to your accountant about tax planning for this year and next year.