I am trying to determine if oil & gas royalties (including overriding royalties) are or ever have been paid on a 1952 Federal lease situated in the Big Eddy Unit. I’ve checked with XTO, operator of the unit, and the BLM/ONRR. I have been unable to locate a responsive XTO contact. The BLM/ONRR contact(s) indicated that this lease is currently “held by allocated production” but stated that I would need to file a FOIA request to receive any information on a lease basis. I assume that the “lease basis” information I would receive would tell me if any royalties have ever been paid, if any royalties are in suspense, &/or if royalties are currently being paid but I’m not certain. What is the most efficient way to obtain this information?
I may have my answer to the royalty questions following the call I received 3 hours ago from a man at the Dept of Interior’s ONRR. His info is that no royalties are currently or have been received under this 1951 lease even though the lease is still in effect with a status of “held by allocated production”.
At any rate, the legal description is all of Sec. 4, T21S-R30E of Eddy County, NM and I know that there was 1 well drilled on this section many years ago but it appears that it never produced but was possibly re-entered and that the re-entry never produced before being P&Ad some time ago.
It appears that the Big Eddy Unit pays royalties on a lease basis but I can find no current (nor planned) wells that include this lease acreage in their spacing or participating area. The fact that some of the Bone Springs and Morrow wells being permitted in this county are planning for 4 mile laterals plus the fact that I don’t really know what I am doing nor how to wade through the NMOCD website makes this awfully complicated!
The reason for this inquiry in the first place is that I am trying to help a friend of mine who inherited an ORRI associated with this lease but who has never received any royalties understand why he is getting so many purchase offers for this ORRI. He owns 50% of the ORRI that was carved out of the base 1951 Federal lease via a1952 assignment from his Mom (the original lessee) to Richardson & Bass. His sister, who owns the other 50% of this ORRI sold her interest to a Haynie Enterprises in 2019 before assigning this share of the ORRI to Tumbler Energy Partners shortly thereafter…so my guess is that Tumbler just purchases mineral interests, including ORRI, banking on future drilling activity a subsequent royalty payments.
I do believe my original question on royalty payments has been answered and I don’t wish to burden you with any additional questions…that being said, if you have any information on this area, specifically any drilling activity (XTO is the unit operator) it would be appreciated.
On a last note: I stumbled onto your fine service a couple of days ago and it is very helpful. If my friend does decide to sell his ORRI it may come in as a great resource to evaluate offers…although he swears to me he doesn’t want to sell it but instead leave it for his kids.
Yeah those old leases and old overrides are still in effect. Basically all of BEU is “held” even though it currently would pay on a per tract basis (at least until producing acreage is rolled up into a participating area). But that is another story. All the 50’s ORRI are still in effect.
Which is good for your friend. As selling to Kristen Haynie at $3k/NRA in 2019 was, in hindsight, not the correct call.
That all said, there is nothing going on there. But XOM/XTO is getting there eventually. May take another 5-10 years. If your friend is patient and doesn’t mind getting nothing for 10 years, it will eventually get drilled up and things will be pretty good. I assume.
Tumbler long since sold the sister’s stuff, that’s how it goes.