Howdy all, so I signed a 3 yr with 2 yr ext. at 3/16 lease with a company called “Dudley land” and they sold it to EOG resources. 5 horizontal wells, Started drilling in April 2018. First Sales were in August. I got some paperwork to fill out a W2 in Nov. From what I have “read”… don’t they have like six months to send me my royalty check? I am getting nervous that they have swindled me. Ive have gotten over 50 offers to sell but am holding on. If I haven’t gotten a check after the 6th month mark should I get a lawyer? Thanks in advance- well names- Wilson 0817 1H spud 4/28/18. Wilson 0817 2H spud 4/27/18. Wilson 0817 3H spud 4/14/18. Wilson 0817 4H spud 4/15/18. no info on 5th well
Not to worry at this point. Did you get the Division Order along with the W-2 in November? If so, then just wait. You probably will not get paid until February or so. If the first sales miss the check cut date for a particular month, they go into the next batch.
Thanks for the info. I got a w2 but not a division order. I assumed I wouldnt get one because already chose 3/16 royalty with $300 bonus back when I signed the lease or maybe they haven’t sent out the division order yet so not sure.
The first W-2 may have been for the leasing so they could send out the 1099. When the wells are finished and the OCC has determined the final order, you will get the Division Order and a new W-2 (if the operator is different from the leasing agent.)
Thanks again, This is all so confusing! lol
So just a quick question. Looks like they are finishing up on the 5th and final well. Is it 6 months from the first sales of the last well or first well ? If they are waiting till all wells are completed and producing then I may have a longer wait than Feb.
It depends upon how they frac them. The current trend is to drill them all first and then frac them with a zipper frac which is much, much cheaper than doing them one by one. If they do that, then you will have to wait until the last well is frac’d. They have to run the bottom hole surveys in all the wells and determine the splits for each well’s participation by each section for hundreds of mineral owners. That can take months. So, most likely past February. However, if your title is clear, then you get 12% interest on the royalties if they are late, so not bad.
If all these come on line at the same time, you might want to contact your accountant for tax planning purposes. This can put you in a higher tax bracket for the next two or three years and you need to be ready to pay quarterly taxes if that is your situation.
Thanks, I only own less than an acre .625 so it wont be to big of a royalty but those 5 wells are big producers! lol
Little bits add up! Might not put you in a new tax bracket then…