Hello my brother and I are new to all of this. We have rights in Doddridge County. We did sign a lease with Antero in 2016. That lease is now up and they are doing a yearly lease now, is this common? I have read and learned a lot on this blog! I’m thinking it is an horizontal well? We both live out of state, and were so surprised by all of this. Like we will believe it when we see it. How long do these produce? Antero said that they are now producing. Did the amount they say we have coming just start from January? Did it start just in the month of April, when the lease was up? Or did the royalties come from the five year lease? So many questions…I appreciate ANY help on this! Thanks in advance
First I suggest you go back and read the lease and any addendum items in detail for understanding of the terms. Any lease I ever saw includes wording that once well(s) are producing the lease is in force unless abandoned so I don’t understand the part about a year to year lease if the property has been producing. Did you receive a DO (Division Order) to sign? A signed DO was required for any wells we eventually were paid royalty on and details the percentage of total production you are entitled to. There are experts on this board that will likely respond with more information.
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Hi Smiling Down, can you provide any other information? There are over 500 wells operated by Antero in Doddridge County.
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Yes, we did sign Division Order Papers. We had received $ x,xxx.oo for the 5 year lease. Now since the lease was up in April, they sent us the paperwork for the D.O. They said we we had money sitting there for the wells (we have 2 parcels) and that our account was in suspense (so7), until they received the signed D.O. paperwork, which we scanned and emailed to them 2 weeks ago. We had not moved so I know that the paperwork is up to date. The Property name is Baker Unit 1 H & 2 H. The NRI (?) # is 0.00095936. Also, I think this the well/tract number? TFork 6-13PO28 NA 0.61835 & TFork 6-13-18 NA 2.33333? It was a 5 year Paid-Up Lease. But like I said since the 5 year lease is up, when I talked to Antero, they said there are doing a year to year lease. And that they are producing. I have also others numbers… 04 AP 17418 & 04 AP 17419. Thanks so very much for all the help! Have a wonderful Day!!
PeteR, please see my reply to James_Powell. Thanks so very much!
Hi SmilingDown. Baker Unit 1H has API number 47-017-06468,
and Baker Unit 2H has API number 47-017-06469. Baker Unit 2H has been in production since 2015, and Baker Unit 1H has been in production since 2017. For whatever reason, the operator was not able to locate you for payment, so your funds have been held “in suspense”. The good news is it sounds like they found you and you recently received and filled out a division order. Typically it takes 4-5 weeks for a division order to process, so you may still have a couple of weeks to wait.
Since the wells are both producing, the existing lease would most likely still be in effect as explained by the James Powell post. I think it may have only been a matter of semantics when someone referred to your existing lease as “month to month”. This is true in a way since the lease is “held by production”. If production ends, then the lease will end. Typically production has to cease for more than a month for the lease to actually end,
but the “month to month” idea at least conveys the idea that there is no specific end date and that the lease is contingent on well production.
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Thank you so much for this info! I guess now the only thing I have left to ask is the tax issue. I live in Wisconsin, so when I get my 1099, do I file my taxes in W.V. and Wisconsin? So should I look for a C.P.A., in West Virginia? How does this tax part work? Or should I just plan on saving 1/3 of all income from royalties? How much can I expect to pay in taxes? Thanks Much!
SmilingDown, As to taxes a good CPA in Wisconsin should be able to figure your tax with WV. You will need to file a return with WV based on your earnings from both wells’ production. In the future you should probably file Estimated Tax Payments on projected production earnings with WV so you don’t get a penalty and then file a return annually with WV along with your other Fed and State returns. There will also be some county tax due. I live in AZ and file with WV annually and do the Estimated Tax Payments quarterly that my CPA figured. You can get the production numbers for your wells on the dep.wv.gov website on the Database & Map page. They are in an Excel format. That way you can crosscheck what is on your statements as you receive them. However realize that there is a difference in volume at the wellhead and what is paid in final production. There is production data for 2017 thru 2020 on both of your wells. If you need further help finding the numbers let me know.
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Hello dome! Thank you for your answers. I still have some questions, why would I get a tax penalty if I pay my taxes? Might be a stupid question, but can I just put 1/3 of my money into a separate savings account and pay the taxes when I get all the paperwork? I saw there are like three different kinds of taxes and codes. Is this true? How do i know if my account/C.P.A. will know about these and how to process? I need help…If my brother and I get a bigger check for the first one, I was planning keeping a third back. I mean how much is this going to become? Just added income? Enough to retire as i am 50? Thanks so very much for the info and help/
Smiling Down, Assuming you get a check from Antero for your past due royalties back to 2016 or earlier, you will then owe taxes for this year 2021 when you received the income. Estimated Tax Payments are in lieu of what most of us did when we were working for a company where they withheld taxes each month from our earnings. The WV Tax Department wants payment quarterly in amounts that reach the total estimated tax liability for the year. They are due in April, June, Sept and Jan of the following year on the 15th of each of those months. Then when you file your WV return for 2021 and future years you will have payments that you subtract from the tax due. In this manner as long as you have paid a sufficient amount in each quarter you will not have a tax penalty. Talk to your CPA/accountant and if he/she is not familiar with WV tax filings you can get someone else. You can also call the WV Tax Department for advise once you know the amounts you expect to receive. (800 982-8297 or 304 558-3333) Once you hopefully begin to get monthly statements and checks you will be able to approximate future income from your wells and better estimate your tax payments to WV. Typically checks trail about two months from when the product comes out of the wellhead. Jan payment in March, Feb in April and so on. I would advise to look at this as added income and wait and see how it plays out. Remember in almost all cases the monthly amounts will tend to decline as the wells generally produce less over time but they should still produce for several years. Hope that helps.
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Thank you very much for the heads up. And the phone numbers to tax man as well. I appreciate your time and effort!! For now I’m going to wait to see what the check will be. And what the check statement will look like. Do you think the statements will have an explanation and dates on it? Thanks Much!
The statements I receive from Southwestern Energy show the volumes for Oil, NGL’s and Gas for each well each month and the payment received from each category based on your decimal interest from your Division Order. There is really nothing regarding taxes. Since you have past years of revenue hopefully they will break it down at least by year if not also monthly. Doddridge County should have also been sending you an annual small tax statement each year for your parcels. Now that they are producing that will increase. Our statements for Marshall County come in August and since this is our first year of production I am not sure of the amount of increase. Lastly as PeteR commented since your wells are in production that will hold your 2016 lease in effect. I would be very cautious of any new lease proposals from Antero unless they offer better terms which is very unlikely.
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OK thank you! I guess I will be making a call today to W.V. Tax Department. Have a GREAT Friday. And We will see what happens the last day of this month, isn’t that when they deposit the payments? Thanks again! 
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