Question, a company ask to do seismic on my land with other owners. We signed in 2017 about April or may. Signed and waited for check to arrive. Never did, so I called to ask about it. Man said it would be sent out about November. Waited some more, never heard or received check. I called again about a month ago and was told that the higher up company didn't buy the seismic products so they were not able to sell it and we would not be able to collect the money were promised. Is there a remedy for this. Never heard of this happening. Anyone have any suggestion? It would be appreciated. Thanks in advance. Louise
Louise, if by "remedy" you mean a way to force the company who acquired the permit to pay the agreed bonus, you'd need to ask an attorney, but I don't think typical seismic permits are enforceable contracts. It's similar to what can happen if you give someone a signed/notarized oil lease before you receive the bonus payment.
On future permits I'd insist on including specific time limits by which work has to be completed or the permit terminates, and if they won't agree to exchange payment for the signed permit at least require the payment has to be received before they can enter the property.
Louise, First, take a look at the exact terms of your seismic permit. Generally, you are to be paid if seismic testing is performed and the data is gathered. The data is then entered into a seismic information bank and sold repeatedly to third parties. The landowner is not being paid if and when the seismic data is purchased and then receiving additional payments every time the data is "sold" - which is really meaning licensed for specific use. Second, find out if any of the other landowners were paid.
Third, send a certified demand letter for payment of the funds due. Best to send a joint letter. Point out that your agreement to the seismic was conditional upon payment and therefore the unauthorized incursion onto your land was both a physical trespass and a subsurface trespass to the minerals and subject to damages. Demand that 100% of the related data be sent to you as the mineral owners and deleted permanently from their records and seismic library. Ask specifically who has had access to the data and where all it is stored and any other questions you can think of. Send the letter to every company associated with the seismic survey, from the land agent to the company physically conducting the seismic to the listed company wanting the data.
In the future, do not sign any seismic permit without making changes, such as that no one can enter the property unless payment is made in advance. Limit the time of the survey to specific number of months from date of signing. Limit to a single seismic survey during that time. Do not allow the permit to be assignable to any other parties. Require that the seismic company or an authorized agent sign and return the permit before seismic is conducted. Do not let anyone tell you that your lessee has said the seismic is fine and you have to agree. If your lessee is conducting seismic solely for its own purposes and related to the lease, that is acceptable. Otherwise it is up to you to approve or not.
Concho to acquire RSP Permian in basin’s “biggest transaction ever”
In a transaction that Investor’s Business Daily called “the biggest ever in the Permian Basin,” Midland-based Concho Resources said this week it will acquire Dallas-based RSP Permian in a $9.5 billion all-stock transaction. The deal will create the Permian Basin’s largest crude oil and natural gas producer from unconventional shale. Tim Leach, Concho CEO, told reporters in a conference call Wednesday, “As companies get to this point and look at their assets and their activity, the efficiency you can gain by a bigger balance sheet and a bigger program is really what’s driving this.”
The Wall Street Journal said the deal “could herald the start of a consolidation push in America’s most active shale-drilling region.”
The deal will add 92,000 net acres to Concho’s existing acreage in the Permian to bring its total net acres to 640,000. The combined company will run the largest drilling program in the Permian Basin with 27 rigs. In 2017Q4 production on RSP assets totaled about 55,500 boed on a two-stream basis (80 percent oil, 20 percent natural gas) and 62,400 boed on a three-stream basis (71 percent oil, 17 percent NGLs, 12 percent natural gas). The transaction adds 2.2 billion boe of resource potential (two-thirds in premium resource, Concho said). The deal includes RSP debt and is expected to close in 2018Q3.
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Expect Concho to buy up some other exploration companies in Reeves
and Culberson counties....they would like to eclipse Apache, Noble-Permian, Primexx, and Oxy in these counties.
And don't forget Clayton Williams landmen buying everything they can in
Culberson county. Drilling is about to go crazy in these two counties.
We just got our first royalty check and an explanatory form to go with it. We are trying to understand the form and have a couple of questions I hope someone can answer.
First, there is something called PLT listed in the same column as gas and oil. My researches indicate PLT is Production Logging Tool - but that doesn't make much sense since there is actual production and dollars listed for it. That wouldn't seem to indicate a tool.
Second, we always understood the first check would probably be for several months. But the column for Production Month and Year indicate only one month - January 2018. Do they roll several months into one month for the first check? TIA.
Liz
PLT...Produced Liquids Treatment/Transfer....any condensate for gas wells
or crude oil for producing wells.
Dusty and TennisDaze, thank you so much for your valuable information. This is always a learning curve in the oil and gas business. I really appreciate your help.
Louise
Thank you so much, Lawrence!
Liz
Liz...in answer to your second question, it depends on the producer. Some will send the royalty holder an accounting every month with their check....others may opt to pay you quarterly and have an accounting page
included with the check. At the end of the year you'll likely get a 1099
listing your royalty income for the year from them.
Lawrence, our lease requires them to pay monthly, at least after a certain period right at the beginning. So this is our first monthly check. From our readings on this site, we had assumed it would likely cover the first two or three months of production. However, the form says it is for January production and lists no other months. So then we wondered if it is common for the first two or three months of production to be rolled into one month for the purposes of this form and initial payment. IOW, the other months wouldn't be listed separately for this first payment.
I've done all the checking I can do and haven't been able to find production info online yet for these two wells. So I can't find out the answer that way. I guess we'll know more when the second check comes. Happy Easter to you!
Liz
Liz....likely your royalty check will have a month 'drag' on it. Like my
royalty check for February just came in March 28th and I'll get the check for March the end of April.
By the way, don't let them direct deposit your royalty check in your account because they put a small script clause in the agreement to allow them to 'claw back' from your account any overpayment mistakes their
accounting group might make. I make them issue me a paper check each month and personally deposit it in my account....they have no direct access.
We actually get the payment through a trust which holds the mineral interests. The oil company pays the bank that manages the trust. When the bank called us, they mentioned looking at a check they had in hand so I think we're OK on that front. Thanks for the heads-up though! We will definitely make sure the oil company cannot access our account there. This is great advice for everyone.
Liz
The news reports of the Concho acquisition of acreage stated the cost per acre acquired worked out to $75,000 an acre.
Anyone have any idea of what acreage valuations actually are in Reeves County? Are there trends, are there zones of estimated value?
Thank you. Happy and Joyous Easter!
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Is there a "rule of thumb" between lease bonus for a 1-year or 2-year lease compared to 3-year lease for 200 acres in half section?
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Liz, Be sure to check the CONG on the Texas Comptroller webstie. You can use the well permit number if no lease number has been assigned. Add the county and use date formats such as 1710 (Oct 2017) and 1801 (Jan 2018). The oil companies cannot delay reporting sales volumes and revenues and paying the severance taxes. This is public information.
TennisDaze, thank you for showing me a new place to check for info. I didn't know about the Comptroller website. It will be very useful in the future. I can locate info on an old well in the area so I can't be doing everything wrong. But zippo on these two new wells. I guess all will be revealed in time. Thanks again.
Liz
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TennisDaze, I've continued to work and did find the info. Thank you!
Liz
I am in the process of selling some Net Royalty Interest Acres in Reeves Co. which I inherited back in Jan. 2008. Any suggestions on determining the historical Fair Market Value for my capital gains tax cost basis? Are there appraisers who specialize in this or is there a public record area I could check for comparable Net Royalty Interest sales?
Patrick
TEXANS DO WELL WHEN OIL AND NATURAL GAS DOES WELL!
When our state’s oil and natural gas industry does well, all Texans benefit. And the proof is in the numbers! After a year of remarkable and sustained recovery, the Texas oil and natural gas industry paid just over $11 BILLION in state and local taxes and state royalties in fiscal year 2017 – providing the equivalent of $30 million a day in funding for our schools, universities, roads and first responders. Texas school districts received $1.1 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities and counties received $336 million in oil and natural gas mineral property taxes. Beyond state and local revenue, Texas saw steady oil and natural gas job growth throughout fiscal year 2017, with the industry supporting more than 308,000 direct jobs. These hard working men and women earned an average of about $127,500 a year – 2.4 times the average pay in other private sectors.
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I was born 'Oilfield Trash' and I'm still proud to be 'OT'
Sean -
I would be happy to get you an offer on your acreage in Sec. 69 blk 13. Please send me an email at kmckanna@powderrivermp.com and I can get you an offer.
Thanks