Young County, TX oil & gas discussion group. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.
Because of my ignorance about minerals, and now I am revealing my ignorance publicly on this forum, I have questions. I started with an unanswered call to the operator of a well, then promises of calls from the distributor, but no answer. I should probably call the TX RR commission, but will attempt to get a question answered here before showing my ignorance there. On the TX website for production data, http://webapps.rrc.state.tx.us/PDQ/home.do, I have tried to educate myself on the available information there and have recently seen a huge discrepancy in the amount of oil produced at a well vs. the amount of oil recorded as distributed. It is from this distributed amount that I receive royalties. What I am asking and not getting responses for is, how can the total amount of oil that is produced vs distributed vary by 25%? I would expect that there is some loss due to variance in temperature when the oil is removed, but not a 25% loss. What other factors can reduce the production amount? For instance/example, the well in question produced 448 BBL and 1129 Casinghead (MCF) gas and the royalty payment for the distributed amount was for 332 BBL. Why the difference in BBL and what happened to the Casinghead? I need enlightening.
You are on the right track to compare reported production vs. paid production. However there are many explanations why the totals are not comparable month to month or even quarter to quarter. After a year, they should be within a reasonable range of each other. In that time you will most likely see many monthly corrections on your check stubs.
Check your pay stubs for non-tax deductions. That is usually work keeping an eye on as a percent of total royalty and if it gets too high a letter to the operator may bring results.
Thank you for responding and providing guidance. The total I stated was the yearly total with the few reported monthly totals always being the same variance between production and distribution amounts...about 25% difference. There are no non-tax deductions on pay stubs for the last 5 years, so I will probably follow your advice to question the operator...if he will respond.
I don't look at your question as being ignorance. You are concerned as you should be about the honesty of the producer/oil company. It's your monies and you should be concerned. Thank you Gary for your professional answer to Ms. Rouse.
Ms. Rouse, in the future you may need the services of Mr Hutchinson to get the operators/oil company attention to pay you the amount you are entitled to.
Thank you both. My original post of ignorance, plus your enlightenment concerning production vs distribution is spot-on. The operator is stellar. Once I broadened my search to include not just the tax year 2012, which prompted the query in the first place, but also 2011 and 2013 (with a royalty check that had not been posted), the production and distribution amount variance narrowed to acceptable amounts as Gary had explained. Next and last question for a while...what prompts an operator to service a well? It's hard to understand when royalty checks are sporadic. One year it might be once every three months that a check is received for a well and the next year it might be once every six months, then the next, once a month and you think you've died and gone to heaven until you pay your taxes. :)
Several years ago, I signed drilling leases in A-534, 535, 536, 539, 540, 898, & 1914. Can anyone tell me if there has been any recent action in any of these abstracts? The RRC map doesn't indicate any new wells or permits, but I'm hoping someone on this forum has more information than what the map shows. Thanks for your help.
I came across a file from 1953 showing that my Great Grandfather owned a 9.6% Working Interest in the following:
80 acres, all of John Cates Survey, Patent No. 280, Volume 21, Abstract 1398, Young County, Texas.
Phillips Petroleum Company was the payor in 1953.
Is there any way that this well is still producing and thus my brothers and I as beneficiaries are entitled to any funds?
Just checked the Railroad Commission's online map (http://wwwgisp.rrc.texas.gov/GISViewer2/), which shows there were two oil wells in the John Cates Survey. One, the McKinney, Eulalia -B-, was plugged in 1989. No lessor is listed, but the well operator was James G. Stewart. The other well is so old that there is no information on the online map; my guess is that it was plugged long ago. You would likely need to contact the RRC to find out more about these wells, including whether there are any royalties in suspense that you might be entitled to.
For what it's worth, there were quite a number of wells nearby, mostly to the south and southwest, all of which look to be plugged now, but it's certainly worth keeping an eye open for new exploration in the area. You might also want to file an Affidavit of Heirship with the county to make it easier for landmen to find you and your brothers should an drillers want to explore in that survey or the immediate surrounding area.
Mr. Halsel, Since this was a Working Interest, I would suspect that we would not have ownership unless the production continued pursuant to some old lease. Am I incorrect?
You're probably right - I wasn't thinking clearly when I answered your query. Given that I'm only an owner of various royalty interests and not someone in the industry, I can't say for sure, but you may very well be correct. Again, it wouldn't hurt to contact either the RRC, Phillips 66 and/or ConocoPhillips (not sure which of the latter would have your well) just in case, though.
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