We’ve had a few bumps, but I certainly wouldn’t say they’ve cheated us, at least so far. We’re pretty excited about Apache joining the group…background information on them suggest they don’t enter into small endeavors. New pictures on the Shale website show pad prep.
One member of the family who was the main conduit of communication was paid almost immediately. The rest of the family hasn’t seen a nickel. We signed in late May.
I wouldn’t say anyone has been cheated Bonnie. It’s much to early for that. They’re just slow with the payment.
I still have a question on individual leases–Is it common practice to pay everyone at the same time even though the family members are on individual lease or do they pay each one at different times so as long as everyone is paid up in the time line they stated.
In our case we remained unified for the better part of 9 months in negotiating our terms. Can’t really say if this had an affect as far as all of us getting paid at the same time or not but that is how it all went down. I wonder if it has to do with apaches drilling schedule as to when people get paid. First on the list get paid first? I am only speculating but that was our experience.
Got all my questions answered only with the help of you all–Thank-you again. The only receipt of payment we have is the Bank Draft. They say we may not get payment for up to 3 months–did not like hearing that . Billy-Bob were you given a time line on when to expect payment. The reason for the length of time was because we were not in the priority area. Time will tell.
Bonnie, asking for time before payment is normal and acceptable. They do require it for a thorough title search. Though they get your signed lease only after the payment is made (however many days that is). Yet, “90 BUSINESS days” is about four full months and is far too long. 30 BUSINESS days, or 60 CALENDAR days, is more than enough time for anyone to run your title even in an overcrowded courthouse in the midst of a boom. I suspect Shale Exp asks for 90 business days because they’re not as well capitalized as they like to present themselves to be.
Bonnie, “how long” it takes to receive royalties varies greatly. Here is a very rough timeline. To begin, your lease is for X number of years. They can begin at anytime during the term of your lease (if ever).
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Drilling permit is valid for 1 year. So after applying they may wait almost 12 months before they commence.
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Building a drill pad and access roads may be another month or two.
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When drilling starts, wells are 20 to 60 days to drill.
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Completion is next. This is about 10 days, though much longer with problems. Also some companies don’t like to fracture wells in winter. So a November well may not be completed until April.
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They hire an attorney after completion to run the records AGAIN to create a Title Opinion used to determine how much to pay to whom.
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After they’er satisfied with their Title Opinion they’ll mail you a Division Order. If you agree with their numbers, sign and return it.
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Then depending upon the company, after they receive your signed division order, you will receive your first royalty check in a couple of weeks, or a couple of months.
So if they drill and produce, from the time they file for a permit on your property it may be two years before you receive a check. After drilling begins it will be 7 to 12 months before you’re paid.
Since you’re new to this keep in mind two more things. Your first check includes several months production & will be the largest you receive. Further, well production declines with time so expect year two to generate half of what the first year paid. So don’t base future expectations on the first check, nor the first year’s revenue. Hope they hit a big one for you! Good Luck.
Thanks so very much for the information. I truly appreciate it.
John Backus–you say you have waited sense May for payment. What Company are you signed with??
Patti,
We signed with Shale
Bonnie, I don’t expect Shale to cheat you. However it is best not to place yourself in a position where it could happen. Across the country this does happen every day. Nothing against Shale. Yet I expect them to pay before delivery just as I expect Conoco, EOG, or Exxon to pay first. It is a common request. Out of dozens of leases I’ve only been refused once. In that case I leased to someone else. Again, there is no valid reason for a company not to agree to it.
I certainly agree that it could happen. Not sure how valid their argument is, but on the two leases that they expected us to wait the 90 business days…they said it was so they could do title work. Is that not really the case?
It should be on the bank draft they sent along with the lease.
Yes, I’ve had two leases that were the 90 business day deal…the latest is paid within 10 working days after receipt.
There are several of us “inheritors” in this family. Because I’ve been the most vocal (called too aggressive) it sometimes seems like I’ve gotten leases and paid sooner than the others and gotten returned phone calls. I think it might be the “squeaky wheel syndrome”. When we ask why we don’t all receive things at the same time, we’ve gotten the answer that ‘each lease is individual’ which makes no sense to me. Anyone?
Ouch–after hearing Billy Bob’s experience and them telling us maybe not for 3months–My family members signed and sent 3days before me so I didn’t have a choice Eastern Mt I agree with your advice on payment. I tried to send your advice to my brother but landed on deaf ears. So if they do not pay by 90 business days then our contract becomes nule and void Correct.
Patti, not correct. Shale can keep you hanging as long as they like unless you take action. If Shale has your lease they can record it a year from now and you may have to retain an attorney to try and get paid or get a release of record for the lease. I would say not to borrow trouble, 90 business days is quite awhile and Shale may pay you in that time but if they don’t, take action quickly. Make a demand for payment or return of your lease. It is important that you make a demand for payment so they can not say that you never required them to accept and pay within any certain timeframe. As my lawyer explained to me, time is of the essence in an oil and gas lease, if the lessee does not pay or act to ratify the lease in the alotted time, or if no time was specified, within a reasonable amount of time, you can record a document saying the lease is null and void. I hope they pay you but if they don’t, get some legal help quickly. The instant the lessee got their hands on your executed lease, you gave up the rights to your minerals. If they do not pay you, it isn’t illegal to owe someone money, it’s a business dispute in the courts eyes. Whoever holds your lease can sell it to someone else even though you have not been paid. You pass your mineral rights when you give the executed lease and the other side accepts, not when you get paid. This is why you want to get paid first. I hope it works out for you.
This all sounds very dark. Has anyone actually been cheated by Shale?
Bonnie…I don’t think shale is going to cheat you. My experience with them was good.
It is pretty cool. They anticipate this field being much larger than the elm coulee in Richland county.
One other question, since you have dozens of leases Eastern MT…have they drilled on any of them and are you now receiving royalties? Just curious about how long it might actually take from when they first start construction to when they begin pumping. We know so little about this process.