Some of our mineral rights in Williams County are leased to XTO Energy and a well began producing in Jan 2011 and we've had a struggle getting XTO to first issue the divion order (finally done after 10 months of production) and now getting royalty payments on the revenue for Jan to Sep 2011 XTO drags its feet on everything and I'm at a loss to make them show a sense of urgency. Any ideas on how to light a fire under XTO. Can they just continually delay payment? I know they are paying 18% interest, but at some point we just want to get paid the past due royalties.
Mr. Gaffin, I have never heard of anything you can do to give them a sense of urgency. If not all of your minerals are leased, I'd make sure that payment of royalty was a condition of a future lease, so the lease would automatically become void if royalty payments were not paid within a certain period of time of first sales and a long paragraph of language backing it up, in which you do not warantee title and the lessee leases from you at their own risk. If they refuse to agree to it, then no lease. The interest, the way they calculate it isn't much of a penalty, and it's only interest on payments more than 150 days past due, and you are only entitled to interest if your title is clean, probates done, title in your name, everything it takes so you are the undisputed owner. If we were talking credit card interest, compounding, I think they would feel the urgency. I know how you feel, my oil has been pumped and sold for over 4 years and I have yet to cash a check. I'm hopeful that I will get the first one I can cash in the next 3 weeks or so.
R.W., Are these long delays usually on an individual basis for a specific reason or do all owners have to wait while they drag their feet?
In ND if you have a title problem, and sometimes it doesn't take much of one to put your royalty on hold forever. Many companies are paying late. Many say they are just too busy, but that is BS. They could hire more people, more landmen on the ground to run down anything the title lawyers didn't like. I think the 18% annual interest on payments more than 150 days past due has no teeth, especially as I have heard the companies usually do not automatically pay the interest even if you have the cleanest possible title. In my extreme case a land company committed fraud and put a cloud on my title. I have had landmen make mistakes other than the fraud case that has put a cloud on my title and had to take the title lawyer by the hand and walk him through it. I asked if they had even one shred of paper that would indicate that I didn't own my interest, and he replied that there was the landmans memo, that because my aunt posessed my deceased uncles interests that she MIGHT posess my deceased fathers interest also. Luckily not all my eggs were in the same basket. If you ever get some of what these title lawyers take, do not operate heavy equipment or drive.
Michael Hutchison said:
R.W., Are these long delays usually on an individual basis for a specific reason or do all owners have to wait while they drag their feet?
I am having a similar problem with Continental resources. They have been pumping on my property since June 2010. Have yet to see one royalty check. Whats a person to do!
I eventually got a hold of someone in their (XTO) legal department (I implied there might be a law suit)
It turns out they outsourced the title search to a ND firm and the outsource firm was way behind
They did light a fire under the title compnay and checks started coming soon after
We finally got paid a year after the first oil was pumped
the good news is you get 18% interest (which they still havent paid)
Keep after them or you will never see that interest.
William W Gaffin said:
I eventually got a hold of someone in their (XTO) legal department (I implied there might be a law suit)
It turns out they outsourced the title search to a ND firm and the outsource firm was way behind
They did light a fire under the title compnay and checks started coming soon after
We finally got paid a year after the first oil was pumped
the good news is you get 18% interest (which they still havent paid)
As much as everyone loves to find a villain behind every rock, the truth is that there is so much activity in ND these days, that Title Companies, Title Attorneys and Division Order Analysts are just plain backed up.
Even routine title work is taking upwards of a year, even longer if there are defects to be cleaned up.
I hear you but my answer is; Not my problem. If the operator can't handle their business in a timely manner, get out of the business. ND didn't just happen yesterday. The companies have had a couple of years to get their stuff together, what has been lacking is incentive to do so.
Steve Durrett said:
As much as everyone loves to find a villain behind every rock, the truth is that there is so much activity in ND these days, that Title Companies, Title Attorneys and Division Order Analysts are just plain backed up.
Even routine title work is taking upwards of a year, even longer if there are defects to be cleaned up.
We are having a problem with payment of royalties on our older operating wells from XTO. The barrels sold per XTO are not matching with our cross check on the ND oil and gas website. Resulting in us not getting paid what we should. Its not just a few barrels they are off, its hundreds. Also, division orders have been delayed for 10 months now on newer wells, not getting paid at all on those producing wells . They also put a Pad on our land, XTO hasn't been willing to pay fair value for the 7 acres of land they have taken over. We never had any problems with Denbury making correct payments. Curious if anyone else continues to have problems with these issues and resolutions to the problem.
Kristine, If you are comparing what you are paid versus what was produced you are mistaken. You are paid based on what was sold which is reported as "Runs". Some months the operator sells more than they produced and some months less. If the numbers between runs and what you are paid do not match, there is a problem in accounting. Something else you should be aware of is that the OPERATOR reports production to the NDIC, so it would be unlikely for you to catch them doing anything from those numbers, if they are doing something wrong, I think it highly likely that they would do a more through job and doctor the numbers they report to the NDIC. I hope this helps a little.
Kristine, I have been having nothing but trouble with XTO since they bought out Denbury. My highest producers were with Denbury and when XTO bought them out the checks just stopped. I've been on the phone weekly with them and am getting no satisfaction. Apparently there were issues with Denbury not producing the proper documentation (as per XTO) and they are having to do extensive searches to prove ownership. Not sure I believe any of it, but that's their story and they seem to be sticking to it. I made myself the "squeaky wheel" and was finally told that they had all the documentation needed (provided by me) and that it was all just waiting for the proper signature to begin paying. I am told that signature was finally obtained, but too late to receive payment in September, so the end of October will be very telling.
Kristine Frost said:
We are having a problem with payment of royalties on our older operating wells from XTO. The barrels sold per XTO are not matching with our cross check on the ND oil and gas website. Resulting in us not getting paid what we should. Its not just a few barrels they are off, its hundreds. Also, division orders have been delayed for 10 months now on newer wells, not getting paid at all on those producing wells . They also put a Pad on our land, XTO hasn't been willing to pay fair value for the 7 acres of land they have taken over. We never had any problems with Denbury making correct payments. Curious if anyone else continues to have problems with these issues and resolutions to the problem.
XTO has failed to pay us on 2 wells that have been in production since February 2013. So from Feb-Aug 2013 we have not been paid our share of approximately 120,000 barrels sold. We already have a producing well (of which we receive $ royalty payments) on the same section so title/division order is already in place and shouldn't be an issue. So far no one from XTO is returning my message/email. lol
As far as my other comment went about not being paid correctly, XTO/NDSIC had reversed the oil revenue on 2 wells for the past 7 months making numbers not match up. When I finally had time to plot everything out I realized this. It is now fixed on the website.
Question for r w Kennedy, I am learning all about this as I go along. As a mineral owner it seems as though we should be keeping track of all the oil that they extract, not just what they sell. What happens to the extra 3000 barrels that they have not "run" or sold over the last year. Over time those $$ barrels add up. Thank you.