I recall there being some discussion about the Whitaker 1H well potentially beginning frac operations. Do you know it is producing as of today? I checked the Texas Railroad Commission website but wasn’t able to find any updated information.
Mitsui doesn’t seem to be in any hurry to get their wells producing. There may be some strategy to it, but it’s not clear.
You can watch the status of the fracs at www.fracfocus.org. It usually posts there many weeks before the RRC.
The 01 disposition code indicates the gas was used on site.
We have not received a division order and have interest in this well. Hopefully soon this will happen. I understand they are testing the well and still working on it.
Usually takes four to five months from first sales to get the Division Order.
Ms Barnes, I appreciate your response and your expertise.
Regarding the timeline; I assume the testing and prep of the well is ongoing. If I understand you correctly, once there is a productive yield that is for the purpose of sale, the division order is then issued, and only at that point the royalty payment is then prepared to be issued 120 days after the division order is received.
So perhaps a few months of testing and preparation and then the division order. Then the 120 day period to await payment. Does this make sense?
I was also wondering if first payment was for the entire 120 days of production that comes thereafter the division order being issued.
Thank you for your guidance
In Texas, you cannot get paid unless you turn in a DO.
Under Texas Natural Resources Code § 91.402, initial oil and gas royalty payments are generally due on or before 120 days after the end of the month of first sale of production from the well. Subsequent payments are due within 60 days for oil and 90 days for gas after the end of the calendar month of sale. The idea is for the operators to get the DO out as soon as possible and get it back, but the royalty payment date is set by the end of the month of the first sale, not the day the DO gets back. Your first payment will be for the accrued value up until that date, so approximately four months of both oil and gas. Then they will be every month after that (if you have met the minimum royalty), generally oil paid a month after sales and gas two months later. You will see the timing on the statements.
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This is incredibly useful information. Thank you for your contribution here.
Probably a redundant question from a “newbie,” is there a general timeline from the initial drilling date to actual producing a royalty check to a leasee? There are apparently many variables I have come across in reading through this forum; from company preferences, well depth, frac times, regulatory deadlines, etc. Any ‘ballpark’ guesses, or as I remember them being called “SWAGs” (Scientific Wild *ss Guesses)?
A huge SWAG would be a year from spud to bank-give or take a few months. If the well is a standalone horizontal well, may be a bit less. If part of a bulk drill, then longer because they will drill all of them first and each one may take several weeks to several months and then they will frac them all at the same time. Long laterals that go across several sections will need more title time to get the deck ready for all of the owners.
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Thanks so much Ms. Barnes. I have learned a lot from all of your posts.
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