Production happening but checks stopped - Sabalo


#1

My parents have a well in Section 46 Block 32 T3N. They received checks for about 6 months and then the checks stopped. The production reports show that there has been similar production each month since. We contacted Sabalo months ago and were told that they were changing accounting systems. Since then someone has speculated they are storing it and not selling? Anyone have any ideas? Apologies if this has been covered elsewhere. I’m new to this site.


#2

Do you mind me asking which well? We’ve had similar issues with them. Production started months ago, and we just received our first check a few weeks back after many calls and emails from several family members. We were curious if we would even see another one.


#3

TISH 46-03. Production on ours started September 2017. If I remember correctly, it took about 3 months to get the first check but after that, we got a check each month for about 6 months. My understanding was that the delay in getting the first check was normal so hopefully you will start seeing regular checks. I looked up the statutes on payments and it says this: “If the lease or other agreement does not specify the time for payment, subsequent proceeds must be paid no later than: (1) 60 days after the end of the calendar month in which subsequent oil production is sold;”

I wonder if the “sold” part is the problem or if this has anything to do with it? https://www.bizjournals.com/houston/news/2018/10/18/woodlands-based-e-p-company-buys-permian-focused.html

In case links aren’t allowed on this forum, the article states that “Earthstone will acquire all of Sabalo Holdings LLC’s interests in Sabalo Energy LLC and Sabalo Energy Inc. in a cash-and-stock deal” and “the deal is expected to close in late 2018 or in the first quarter of 2019”


#4

Michelle,

If they are selling your oil then they have an obligation to pay you. Sometimes with interest. I would call their office and get to the bottom of this.