Hi everyone, Just wondering what the average time for receiving royalty check after the well began producing. Oil Company put a Confidential Data on process, which expires June 1st. The well began producing in December 2011. Today's date is March 23rd. Thanks for your interest and comments. Pam Kelly
Pam, I believe in most states typically the requirement is for an operator to begin paying within six months after production is sold. Therefore you may receive the first payment in June or July. Though terms of your lease may be more, or less, stringent. If you haven't received their Division Order within the month I'd suggest calling the company to remind them you're here and still waiting. Good Luck
thank you very much for your answer. I really appreciate it.
Pam, if the operator is a public company go to their website…they will have contact info for royalty owners usually under owner tab…send them an emailnasking stats of division order…good luck
Pam:
The main thing that could delay any royalty payments would be a title issue. This is not extemely common but things can get complicated in some estates which causes a delay in payments.
thank you for your reply. I want to ask you another question if I may, The company who has leased our mineral rights is not the company who has drilled the well which is now is producing on our minerals. will the division order go to the company - our Lessee -or will it come directly to us? And will the royalty payments be handled in the same manner? I imagine that each state has its own way of doing things. I will contact the county. I am perplexed at knowing how to find out information when our lessee’s contact person will not return my calls. the land man whom we had originally representing the oil company, has quit. I have never had a lease in which I did not have a land man that I could speak to regarding certain issues such as the question I’m asking you. thank you so much for any information that you can provide me.
You should expect a division order from the OPERATOR of the well. Typically they will also be the one which sends you royalty payments later on. Presumably the operator will be the same company which drilled the well (not your Lessee). In that case both the division order and future payments should come directly to you and not pass through your Lessee.
There are exceptions. Such as when the driller sells their interest, or when a small operator has the oil purchaser (typically a different, larger oil co.) send out royalty checks. Yet unless you learn something to the contrary, look to the oil company which just drilled the well for guidance on what you need to do (signing div. order, etc...) and what you can expect on timing. Good Luck.
Thank you for your reply. Of course you were correct. The division order and royalty payments come from the operator / oil company drilling. The oil company is large. Gulfport Energy. I looked online at GP website and was unable to find information regarding division order, etc. However, I do have a telephone number of the contact person.
I hope this conversation will help someone else on the forum. Thanks again.
Pam
Can I reply or update my own conversation? Actually, I want to update the confidential status issue....oil company extended the status another three months. I don't mind this so much, however, can someone tell me why they do this? The well has been producing 70 barrels a day since December. Surely someone from the county has received the 'required' monthly report from the drilling/producing company.
I have tried to discover when the division order would be mailed to interest owners. The oil company's representatives do not think I am important enough to return my calls. This may be due to the confidential status - which I can understand - but wouldn't you think a return call is warranted? Having held executive positions myself, not returning a call, either myself or by my secretary, was out of the question. It is bad business in my opinion.
Sorry for the rant. haha.
Thank you for listening and hopefully answering.
Pam Kelly
Ms. Kelly, once the mineral owner delivers an executed lease the oil company owns the minerals and they don't feel accountable to anyone concerning what they do with their property. If the operator owes you money, he is not stealing from you, it is not against the law to owe someone money, you are welcome to sue them, if you would like to sue an oil company with huge resources. Once the lease is executed and delivered the lessor is of extremely little interest to the oil companies. It's just the way it is.