They claim they’re still going to pay royalty payments, but given their reputation I’m concerned. How likely are they to stop payments?
Also, when you get paid on 31 Aug is it for the month of August, or is there a time lag? Is it a previous month. The reason I ask is because my check only went up from $5700 to $6400, even though the price of oil climbed well beyond this percentage.
Usually they will continue to pay royalties during a bankruptcy. A special fund is set aside. However, right now, many wells are choked back or shut in, so if low or no royalties, that would affect your check. There is a time lag on payment. Oil is usually one-two months behind and gas is two-three months behind sales. It takes that long to make it from the sales, through accounting, through check cutting to get to the mineral owner. Also, if your Division Order is set at $100, then if your royalties go down to less than that, you have to wait until they get above the threshold. You can reset it to $25. Gas prices have gone up a bit, so might be increased royalties from that. Oil is regaining strength somewhat.
The check stub detail will note the production month, which is the month that the oil or gas was sold and the volumes sold. The check date is only the date the check was issued. You will need to compare the sales volume for the particular month on the check to the sales volumes reported to the state. Texas reports both the production and disposition volumes each month. Many other states only file the disposition/sales volumes for a month. Due to well production decline over time, the price may increase while the volumes decrease. You need to look at all these factors.
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