We, the family found out last year we had gas rights and was informed from Antero Resources and we got a "signing bonus" the well was put in place and started pumping gas and I'm assuming being sold but we have nor received a "Division Order" as of yet, called Denver and a person said 6 to 9 months before any $$ was going to be paid and that they have to re-verified the people that will be receiving any $$$, Is this stander for them to do that?
At least six months, yes.
Thank you, so maybe around Christmas time:), and we was told it may be enough $$$ for grocery shopping each month, not much
Read your lease terms. My lease requires to be paid within 90 days that gas was produced and sold. Every state has different laws and leases vary as well. You should have a paragraph that defines the payment terms.
Ditto what Kitchen said. A new lease from Antero will probably not include language stating that royalties need to be paid within X days of production/marketing/whatever. But older leases might. Check the language of the lease to be sure.
They have been stringing us along for over a year. First the said Oct. 2013 we should get our first royalties, then by December, then end of January, then March, then May, and the latest is by Dec. 2014....
thank you for the info, from what I am reading Antero only has to pay once a year if I am reading it right,,
The standard for making payments in the oil and gas industry is to pay monthly. Usually there's some delay between first production and first payment, like 30-60 days. Sometimes there's delay from first sale to first payment. It's unusual that they would hold off for as long as they have.
There's no language in Antero's standard lease stating that a Division Order must be done.
The language in Antero's standard lease dealing with payments states that they can withhold payment until $25.00 is due, but that they have to pay once a year regardless. The once a year language is only dealing with the situation where you have less than $25.00 due. If they owe you more than $25.00, I'd say they're late on payment, and the validity of the lease is now an issue.
but no Division Order has been issued yet and they started drilling and pumping since Nov 2013
This is complicated, isn't it? If I may ask, what do you mean, Kyle, when you say "the validity of the lease is now an issue?" Sorry, we are totally new at this.
The primary purpose of the lease is to produce gas and oil to generate royalties. If no royalties are being paid, there's a good argument that the terms of the contract have been breached. The contract may no longer be valid.
Now, in West Virginia, there's a presumption that if royalties haven't been paid on an oil and gas lease in two years, the terms of the contract have been breached, and the lease is no longer valid. You haven't hit two years yet, so you can't make that exact argument.
But, that presumption was established for wells that didn't produce much in the way of gas and royalties in the first place. Where a Marcellus shale well is producing millions of dollars of gas, and hundreds of thousands of dollars in royalties, it makes sense that the two year time period would not be applicable. Something shorter could be. It hasn't been tried in court. But if Antero keeps stalling on making payments, they're going to have a court challenge pretty quickly.
Practically speaking, though, the first step would be to write them a letter demanding payment be made. Send it certified mail, return receipt requested, so that you have proof it got to them. If they don't pay up, have an attorney do the same. I sent just such a letter out last week. I'll try to remember to update this thread when they reply.
could I send you a copy of our lease? to check it out?
Sure thing, terry raines. Email me at nuttall.legal@gmail.com.
terry raines said:
could I send you a copy of our lease? to check it out?
Terry,
The state will have the monthly production records via their website. Might sit down and write them very proper and firm 30 day demand letter demanding answers. Might also consider paying someone to do this "demand letter" for you; or another possibility is that law students at your local university might jump at the opportunity.
Lex, In West Virginia the state only requires once a year production reports, due by the following March 31 for the Jan-Dec production the preceeding year. I think Terry's minerals are in West Virginia, I could be wrong. There are some states which much better (for mineral owners) rules.
Thanks Nancy,
I did a google search a few days ago, and found nothing where FTC (consumer protection bureau or attorney general's office) had ever helped people with these royalty payment issues. Did a search earlier today regarding Mineral management companies, to see if maybe they had some teeth, to get things done, & to get better checks. Not much there either, but that doesn't mean that we can't make it happen. I'll certainly do my part. For those that don't know it, what typically happens is that you write your letter of complaint and send it to FTC, and they forward it to operators with a demand letter of their own (investigation). Puts some teeth into it. Shark teeth (rows of teeth ;)
Writing the FTC sounds like a good idea. Is this what you were looking at? I'll try to remember to suggest that next time I see someone in this situation. This situation seems to be happening more and more here in WV.
Lex said:
Thanks Nancy,
I did a google search a few days ago, and found nothing where FTC (consumer protection bureau or attorney general's office) had ever helped people with these royalty payment issues. Did a search earlier today regarding Mineral management companies, to see if maybe they had some teeth, to get things done, & to get better checks. Not much there either, but that doesn't mean that we can't make it happen. I'll certainly do my part. For those that don't know it, what typically happens is that you write your letter of complaint and send it to FTC, and they forward it to operators with a demand letter of their own (investigation). Puts some teeth into it. Shark teeth (rows of teeth ;)
Kyle,
I would call all three offices; Attorney General, FTC, and Consumer Protection Bureau to see what they might recommend. Just that I've not yet used them regarding fair and timely royalty payments. I've used them for other issues; and they took my complaints and resolved them quickly (shark tank).
PA Royalty Owners Class Action Suit Against CHK and ACMP for $5 Billion
http://www.courthousenews.com/2014/06/25/69022.htm
PS You guys may also want to follow the gohaynesvilleshale forum thread.