Lease payment deadline

[Duncan_Fraiser]

I have a lease with Cimarex. How long do they have once a new well is producing to start making payments. I have read the lease and it is not mentioned. According to Cimarex, division orders need to be sent out and returned before payment can start. New division orders are required because the wells have been pooled we adjacent section. Seems to me that they have had plenty of time to send out new D O. Wells have been producing for a couple of months, per Cimarex

[Dusty1]

Below is what Texas Railroad Commission says regarding your question, but in practice these appear to be treated more as guidelines than rules RRC strongly enforces. If your operator exceeds those limits sending them a letter by certified mail, return receipt requested, referring to these sections of RRC rules would be a logical step.

Here’s a link to additional Q&A on RRC’s site: https://www.rrc.texas.gov/about-us/faqs/royalties-faq/

When are royalty payments made?

Section 91.402(a) and (f)

Initial payment

• 120 Days after end of month of first sale

Ongoing payments

• 60 days after end of calendar month in which oil production sold
• 90 days after end of calendar month in which gas production sold

Payments must be paid when the payment reaches $100, or

• If payments do not reach $100 within 12 months and are greater than $10, the aggregated amount must be paid
• Amounts that do not aggregate to $10 must be paid upon the sale or plugging of the property or at the owner’s request
• If an owner requests payment more frequently, only aggregate to $25

When interest is due?

Section 91.403 and 91.407(d)

Late payment interest is due at a rate of 2 percentage points above rate charged on loans to depository institutions by New York Federal Reserve Bank when:

• Payment is late and the title is clear
• Payment is late, a division order is offered that does not comply with statutes, and the division order is not signed

Late payment Interest is due at a rate of 4 percentage points above the rate charged on loans to depository institutions by the New York Federal Reserve Bank when:

• Payment is late and notice that you are the new payor has not been provided

[Duncan_Fraiser]

Thanks for the info Dusty1