I have mineral and oil rights with a percentage , I was told once i signed my lease that the oild company owed me four years back pay and not its going on almost five years and i finally got my division order signed and sent back with other documents too… and i finally got a very small check for 27.00. when i last spoke to thier rep back in march of 2018 she told me i would get a substantial check then after that my royalties checks would be much smaller… so it this is a large check then cant wait to see what next month brings in… 27.00 for for years umm i think there might be something wrong… any sujestions out there. i am new at this stuff
If you post this in the county and state where it applies with a legal description and the well, you might get an answer. Your royalty depends upon the amount of acres you own and the royalty rate you have, plus the spacing of the well.
I do have one quick question…is it possible for a oil company to hold oil production back a bit until a pipeline is completed? I was told that it is pretty expensive to truck oil compared to moving the product through a pipeline. My family owns land in Reeves TX… thanks for your insight!
Yes, it is possible and done frequently. There is not a pipeline to every well in the country. I would hazard a guess that most wells are not hooked up and oil is trucked out when the tanks are full. Just depends upon the size of the production and the economics of trucking small amounts from many small wells or building a pipeline to a big hub of many high production wells. Getting pipelines built is a major endeavor.
Thanks for the insight… My family received a smaller check yesterday from a new well and wondered if maybe they’re holding back production. We’re hoping that the well isnt a low producer because we received information that it looks like a good well. We just submitted paperwork for a pipeline to run through our property.
Any thoughts you have that you’re willing to share will be greatly appreciated.
Thanks in advance
I am going to assume this is a horizontal well since most of them are these days. In general, the first check you get will be for several months of production. Look on the run statement that is attached to the check or that you get online. It should list several months. That will be for the very best of the production as well. The second check is usually just for one month and by that time the pressure has gone down a bit in the well and the production will be slightly less. Natural and happens on every well. Most horizontals have a fairly high production rate in the first two years and then decline to a lower rate that flattens out and can last for decades at that low rate.
Appreciate your help!