This is a survey where we hold unleased interest. We are included in the Knowles unit. What should we expect in communication on this well? We have received many offers to purchase.
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That API goes with the Lipsey 1H. It was permitted 5/21/25. It has not spud yet. You will not hear anything about it until it is completed (and a few months after that.)
Ms Barnes. Thank you for your reply. Some of us are completely unaware of how these matters transpire. I am part of the family that Mitsui purchased the 46,000 acres or so from last year. With this well being the second installation by Mitsui, in this instance myself and my family members have leased this property to Mitsui via Sabana/Vanna. My question for you is as follows; in this thread you state that several months after they spud in we will first hear from the producer. Is there an established timeline for matters such as these? Does a producer have an extended period of time to make payments on the initiation of royalties? I have learned a lot here from yours and Mr Herringtons commentary so thank you again.
I can only give a general timeline as every well is slightly different. If the well is a standalone horizontal well (the first in its area), it can take three-five months to drill and complete. The timing depends upon the length of the well and the timing of the frac crew availability. If there are multiple infill wells, then that time frame can stretch a bit because the operator usually drills the wells back to back and then brings in the frac crew to do a zipper frac to save time and money. That means that they do Step A on well 1, then move over to do Step A on well 2 while they do step B on well 1, etc. Completion reports are usually posted about four months after the actual completion on the state oil and gas site. They are public record, so do not send them to the mineral owners unless your lease says they must (rare). Your first communication from the operator will be about four-five months after the completion of the well. This will be the Division Order. You must sign it in Texas in order to get paid. But you have to check it to make sure that it is right. A discussion for a different topic.
In Texas, Statutory liability for royalties Texas Natural Resources Code Section 91.402(a) requires that proceeds from the sale of production be paid to each payee by the payor on or before 120 days after the end of the month of first sale from the well. OK has slightly longer at 180 days.
So they want the DO and your W-9 back asap so that they can pay you on time.
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Thank you for taking the time to explain. It helps tremendously in understanding a pretty complex industry. I was actually mistaken in this well. It is permitted so close to the unit I’m part of that I thought it was in my unit. I’m in the Knowles unit. Will be interesting to see if a well gets drilled in that unit also. Thanks again
This is incredibly informative and helpful. Thank you.
I mentally put a one year estimated time from spud to royalties in the bank. Might be a bit more or a bit less, but I keep a list of wells, location and expected pay date to follow up.
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