Due to a resent backround check for a job I was appling for I have decided to remove my posts from this web page. When the employer was discussing an offer and salary for the position this post was brought to my attention. The quote was "Since you are part owner in an Oil Field we won't have to pay you as much since we are a non-profit.. right?" Since the well name and my last name are the same I have desided that reading is better then writting. I am on other discussion boards but those boards do not offer the option for anyone to repost to Facebook and perform Google seaches or for the general public to join without having more than an e-mail address. Good luck and I look forward to reading your discussions.
Assuming you are owners, Hultgren 1 at least did well in the past with over 120k bbl cumulative, I'm sure that money was welcome in the past. Hultgren 1 produced 6 bbl of oil per day in march while Hultgren 2 produced 30 bbl in 29 days, slightly more than 1 bbl a day. The thing is, as an owner the Hultgren 2 may be costing you as much to run as the Hultgren 1. I would check to see if the Hultgren 2 is operating at a loss, if it is you may be able to assign your interest to the operator and be paid for the salvage value of the surface equipment and no longer be responsible for the operating cost of the Hultgren 2, receiving no further royalty, but none of the bills either. Another thing to consider is that as an owner, depending on the percentage of your interest, you could be looking at a large bill if they decided to do work on the well or plug and abandon it. I consider ownership in a well to be a good thing and I aspire to be an owner in my own wells, but you need an exit strategy. You may be able to cut some deadwood [ Hultgren 2 ], avoid a plug and abandon bill, get a check for the salvage value of surface equipment and increase your effective royalty that you receive monthly. You would still own your minerals if a new well is drilled. I do not think they are going to improve production on the Hultgren 2 as the area is densely drilled and in my opinion depleted. I can't tell you what to do but I hope you will consider these points, do some research and possibly get a second opinion because this situation could go on for another decade or the plug and abandon bill could come soon.
I looked through the electronic records and saw no lease but they do not go back to the 70's. If you inherited property which was already leased and held by production, the operator has no need to lease you again. In that case you can hope they produce the wells even at a loss because lease royalty won't go below 0. If you do actually have ownership in the wells, consider what I wrote in the previous post.
You would not receive a bonus or a new lease as you have an existing well. A bonus is a one time up front payment for a lease. Who ever owned the minerals in the 70's received this one time only payment. That ancestor also agreed to the terms they and their heirs (you) would be paid if there were a well drilled. So long as that well is in production you as heir are bound by the terms of that lease.
Thank you Daniel that is what i was looking for.
Sarah, sorry if I caused any confusion, I am sure you own royalty rights stemming from your minerals. I am unsure if you have a working interest ie % ownership in the well or whether you had an old lease and only had a royalty interest, in which case you would own 0% of the wells. From your original post you said you have mineral rights and "We own Hultgren 1 and 2 " [ abbreviation mine ] If you actually have ownership and not just a royalty interest from a lease my first response above is what I suggest, find out if you are losing money on that one barrel a day and stand to lose alot more if G3 decides to plug and abandon.........My second response was due to consideration that some mineral owners undoubtedly believe that their lease actually translates to some sort of ownership in the well, which it does not, it only confers a royalty interest in the production of the well/s. I was just trying to cover it either way, owner or lessor. To satisfy my curiosity, are you an owner of some % of two wells or a lessor ? "Assuming you ARE owners" , was me taking you at your word that you actually own an interest in the wells and not just a lessor thinking you owned some part in the well. Ownership in the minerals is not ownership in wells. I responded to what you actually posted. Sorry if that confused you, it was not my intent. Robert
Hultgren said:
r w kennedy said:I looked through the electronic records and saw no lease but they do not go back to the 70's. If you do actually have ownership in the wells, consider what I wrote in the previous post.
2 statements are concerning me I have bolded above and the other is your first statement Assuming you are the owner?. I have a Will that says I'm an owner. Are you looking at documents that would give you some indication that my daughter and i are not owners? If so would you me so kind as to provide the location of these electronic records so that i can make any changes/updates that need to be made. I was not appointed executor of this estate until much later when extreem mismanagement was proven to the courts. Don't really want to get into it. If you are looking at something that does not clearly state that ownership I would not be shocked. But, I would like to correct/update any errors on documents that may have been overlooked or contain any wrong information as to who the current owners are.
Thanks in advance,
Sarah
Mr. Dayton, I am unleased under at least 4 producing wells with a fifth being drilled, since the operators can not impose a risk penalty of 50% of actual cost of drilling if they do not offer me a lease; are you saying that just because I have wells that I will not receive a lease offer ? That's great because it will save me thousands of dollars per acre in risk penalty! You just made my day.
Daniel Dayton said:
You would not receive a bonus or a new lease as you have an existing well. A bonus is a one time up front payment for a lease. Who ever owned the minerals in the 70's received this one time only payment. That ancestor also agreed to the terms they and their heirs (you) would be paid if there were a well drilled. So long as that well is in production you as heir are bound by the terms of that lease.
No, RW. They will have to offer all current mineral owners a lease or attempt to send them a lease. This last lease is usually at the average lease amount in the tract of prior leases which would be "fair market value" which is required by law. If you do not sign the lease they will then send to all unleased parties an A. F. E. which is an Authorization for Expenditure. It will be basically a bill for your share of the oil well or well. If you do not sent in your share of the well then you incur the penalties of the well being drilled and will be "forced pooled". They will have to have at least 50% of the mineral interest under control before they can "force pool" anyone.
and....for the record A.F.E.'s can be sold to people who want to invest in a well as a minority investor.
The other poster wanted to know why she was receiving royalty payments but had never signed a lease nor received a bonus on a well, that went back 30 years ago to a prior owner. Their rights are "Held by Production" and a prior lease (presumably as they are getting paid 9% Royalty). An heir that is already being "held by production" does not sign a new lease....they are bound by the terms of the old lease their ancestor signed.
Thanks Mr. Dayton, I didn't really believe that I could skate on the risk penalty, but I am allright with that.
Mr Dayton, How important is the sequence in what you posted? I received the operator's first lease offer along with the proposal letter that included the AFE.
Isn't there a difference between the AFE and JIB?
Doesn't the unleased mineral owner get notified of the forcing pooling "prior" to any penalty being assessed?
Mr. Babcock. Yes, they should be notified, if the lease mineral owners can be located, but in your case, you know that is a possibilly if they have sent a lease AND an AFE. those are 2 of your (and any mineral owners) 3 basic choices.
They sent you a lease AND the AFE means this is your choosing point. If you do neither, you will listed as Non-Consent and force pooled. You might (though unlikely)...get one more chance to lease. If you actually want the latter and some do, I'd contact the company sending the lease and the AFE and inform them of your choice.
Hope this helps.
I would like to know when I need to arrange or attend the hearing to challenge the risk penalty.
I assumed that I would have to wait until I receive the force pool notice.
You went beyond what I know.
Dear RW Please delete your reply to my post. Thank you in advance.
r w kennedy said:
Sarah, sorry if I caused any confusion, I am sure you own royalty rights stemming from your minerals. I am unsure if you have a working interest ie % ownership in the well or whether you had an old lease and only had a royalty interest, in which case you would own 0% of the wells. From your original post you said you have mineral rights and "We own Hultgren 1 and 2 " [ abbreviation mine ] If you actually have ownership and not just a royalty interest from a lease my first response above is what I suggest, find out if you are losing money on that one barrel a day and stand to lose alot more if G3 decides to plug and abandon.........My second response was due to consideration that some mineral owners undoubtedly believe that their lease actually translates to some sort of ownership in the well, which it does not, it only confers a royalty interest in the production of the well/s. I was just trying to cover it either way, owner or lessor. To satisfy my curiosity, are you an owner of some % of two wells or a lessor ? "Assuming you ARE owners" , was me taking you at your word that you actually own an interest in the wells and not just a lessor thinking you owned some part in the well. Ownership in the minerals is not ownership in wells. I responded to what you actually posted. Sorry if that confused you, it was not my intent. Robert
Hultgren said:
r w kennedy said:I looked through the electronic records and saw no lease but they do not go back to the 70's. If you do actually have ownership in the wells, consider what I wrote in the previous post.
2 statements are concerning me I have bolded above and the other is your first statement Assuming you are the owner?. I have a Will that says I'm an owner. Are you looking at documents that would give you some indication that my daughter and i are not owners? If so would you me so kind as to provide the location of these electronic records so that i can make any changes/updates that need to be made. I was not appointed executor of this estate until much later when extreem mismanagement was proven to the courts. Don't really want to get into it. If you are looking at something that does not clearly state that ownership I would not be shocked. But, I would like to correct/update any errors on documents that may have been overlooked or contain any wrong information as to who the current owners are.
Thanks in advance,
Sarah