Has anyone else noticed that wells acquired by Exxon now have post production costs that were not deducted when operated by Pioneer? There are costs on wells that I know are cost free per the lease, but I cannot seem to get any response from their owner relations to review and adjust. Unfortunately, these costs are about 30-40% of our net income and seem to be applied to all wells across the board on our revenue statements.
Depending upon where the wells are, this can be “interesting”. In Texas, most leases have post production charges, so some operators just have their accounting software set to have all of the PPC charges assigned to all owners. You have to specifically protest to the Division Order group to tell them that your lease is cost free. Have been some lawsuits that have overruled and said “cost free doesn’t mean cost free”. It can take months to get certain operators to respond. Sent a certified letter return receipt to their DO department or royalty department. List your name, address, well names, date of lease and state that no PPC be taken out. Demand interest while you are at it. Keep a paper trail as you may need it.