Yes certainly there Glen, Unfortunately It is the Nature of The Beast!~! You have to stay right on top of them or pay the consequences!~!
Wade, Thank You for your input on what the lease might be worth, that will help me with our negotiation of the lease. I also understand about the costs and clauses. We have land and mineral rights in runnels cty. but I have never leased for this much per acre. Again Thanks!
Hi Donny,
The State of Texas actually owns all the minerals on âmineral classifiedâ land. As the surface owner, they allow you to collect 1/2 of the lease bonus and 1/2 of the royalties. If you were to negotiate a lease with a bonus of $4000/acre and a royalty of 25%, you, as the owner of the surface would receive $2000/acre and 12.5% of the production. Again, you would not âownâ any minerals. You are receiving compensation more closely related to a commission paid to a sales agent. In addition, the State will have to agree with the terms of the lease before they will sign off, so the leases on mineral classified lands tend to be more standardized. I realize that I am bringing up a subtle distinction, but it is important to note the difference and the potential for future policy changes.
Question? if application for drilling a well is posted, how long of time does it take for permit to be okayed and drilling starts? Also, once well is drilled, how long does it take before a person would get their first check? All assistance would be appreciated for a newbieâŠ
Has anyone ever had problems with communication, or lack thereof, from the company that owns your lease? Has anyone ever had problems getting paid your Royalties in a timely, consistent manner? If so, what did you do?
In my opinion, the quicker you take the Bull By The HornsâŠThe Better Off You Are!~! You must always remember that for the most part you are their adversary and nothing more than a nusance to the them!~! Some are better than others but none are your ally and/or Friend!~!
Wendel - I donât know the size of your mineral interest, but I have found much comfort in having an attorney handle the negotiation of the bonus amount and lease terms. Wade Caldwell for this forum has been easy to work with and the cost is very reasonable. Good luck!
I understand that production companies are notorious for bad or no communication with Royalty holders. However, how do you get paid if no one at the company will talk to you. Iâve heard companies donât like certified letters. At what point to you send one of those?
Hector, the first hurdle I see is that it is arguably not public use just because itâs commercial use. It mught have been helpful if the deed forbids vehicled over 5 tons gross vehicle weight except by special permission.
Glen Kirk my experience is best to have an attorney send them a certified letter.(immediately)
My first operator was J.Cleo Thompson. We had a check within 60 or so days of first production.
Louise Welch the last experience I had first check received eleven months after first run check for nine months production.
My thanks to Billy R. Simpson and Stephen Long for the quick response. I appreciate all the help.
Thanks again,
Louise
Louise, Here is the excerpt from the Texas Natural Resources Code. When you sign a division order, it will generally follow a similar time table.
Sec. 91.402. TIME FOR PAYMENT OF PROCEEDS. (a) The proceeds derived from the sale of oil or gas production from an oil or gas well located in this state must be paid to each payee by payor on or before 120 days after the end of the month of first sale of production from the well. After that time, payments must be made to each payee on a timely basis according to the frequency of payment specified in a lease or other written agreement between payee and payor. 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; or
(2) 90 days after the end of the calendar month in which subsequent gas production is sold.
(b) Payments may be withheld without interest beyond the time limits set out in Subsection (a) of this section when there is:
(1) a dispute concerning title that would affect distribution of payments;
(2) a reasonable doubt that the payee:
(A) has sold or authorized the sale of its share of the oil or gas to the purchaser of such production; or
(B) has clear title to the interest in the proceeds of production;
(3) a requirement in a title opinion that places in issue the title, identity, or whereabouts of the payee and that has not been satisfied by the payee after a reasonable request for curative information has been made by the payor.
©(1) As a condition for the payment of proceeds from the sale of oil and gas production to payee, a payor shall be entitled to receive a signed division order from payee containing only the following provisions:
(A) the effective date of the division order, transfer order, or other instrument;
(B) a description of the property from which the oil or gas is being produced and the type of production;
© the fractional and/or decimal interest in production claimed by payee, the type of interest, the certification of title to the share of production claimed, and, unless otherwise agreed to by the parties, an agreement to notify payor at least one month in advance of the effective date of any change in the interest in production owned by payee and an agreement to indemnify the payor and reimburse the payor for payments made if the payee does not have merchantable title to the production sold;
(D) the authorization to suspend payment to payee for production until the resolution of any title dispute or adverse claim asserted regarding the interest in production claimed by payee;
(E) the name, address, and taxpayer identification number of payee;
(F) provisions for the valuation and timing of settlements of oil and gas production to the payee; and
(G) a notification to the payee that other statutory rights may be available to a payee with regard to payments.
(2) Such a division order does not amend any lease or operating agreement between the interest owner and the lessee or operator or any other contracts for the purchase of oil or gas.
(d) In the alternative, the provisions of Subsection © of this section may be satisfied by a division order for oil payments.
MA Smith, your explanation of mineral classified land is how I have always understood it. I just looked at it, as the owner of the surface 40 acres, I got the income from the equivalent of 20 mineral acres, instead of half of the total state owned minerals. Same results, just a different way to get the same dollar amount. By either method, each gets half of the income from the production from the 40 acres Thanks for the clarification. âDonny
Mike Elender I guess Devon Energy must have forgotten to read the regs. they hadfirst production on a well in Wise county Jan. 2013 i received first ck. in Dec. 2013 requested interest after 120 days when sigining division order, guess they forgot my intrest still havenât received any lol
Linton,
Itâs basically a bad legal description and should be amended to more accurately describe the leased premise. Iâm not sure what kind of lease form you signed, but there is generally some kind of language in most base forms that would require the Lessor to execute further assurances to insure full enjoyment of the rights granted.
Lousie - if an app is posted, that does not mean a well will be drilled. a permit can be out there for 2 years before itâs supposed to fall off but very rarely ever does. if it a well is drilled and completed, sometimes it can sit for a while until the infrastructure is put into place. from permit to tie in could take 6 to 8 months and then you have another 60 to 120 days depending on what your lease says. If you have not recieved a check in a year, call them persistently and get a lawyer involved. also, check the state for unclaimed funds. weâve had operators escheat funds to the state even though they were paying us on other wells in the same field. http://www.window.state.tx.us/up/
M A Smith - pertaining to Mineral Classified land⊠a lot depends on when you recieved your agency. some of our minerals we recieved back in the 30âs and the state only gets a 1/16th free royalty, on others, they only get 1/2 of the bonus, no production. No deal with the state is the same, however when leasing mineral classified properties, the leases are always standard issued State leases. The agent does not get to change any of the verbiage at all. some addendums can be added as exhibit âAâ and have to be approved by the GLO.
Thank you all for the valuable information on Blk 55, sec 8, twsh 4. I was really excited when I saw the permit application. How would I also check the completion of wells in my neighborhood as to how much production they are producing? That would be interesting to be able to see the amount in my area.
Once again, thank you all for all the help and information. It is so appreciated.
Louise