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Communicating with oil and gas companies.
Communicating with Oil/Gas Companies. When we first started with XTO/Exxon several years ago there were several outstanding issues that I could not get resolved. They kept blaming it on Covid (short staffed) and they were out sourcing their customer service dept. I ended up writing a letter directly to the Chairman of Exxon and within 2-3 weeks I had 2 calls from managers and the problems were fixed within 2 week after the calls. Don’t be afraid to start at the top and work down. Policy is followed by those on the lower levels while policy is made by those at the top and they need to know exactly what the problems are not just some executive summary of customer complaints/problems.
If you send a Certified Letter, return receipt requested to a companies legal department it works “wonders”. It puts a spotlight on the people responsible.
Ditto on communications, mostly due to XTO/ Exxon.
“Clearing title to inherited minerals” and “Royalties in suspense are my personal problems”.
Soon to be “Spending All That Money”
Thank you for that tip Mineral Owner 5 !!!
Thank you for sharing that information Jhab !!
Most of these options are challenging if you are new to the process. First learn that the landman works for the company and is trying to get the best deal for the company. And I might add that I found many attorneys in the leasing area are loyal to those companies too.
All is so confusing, do not know where to start. Blue links do not open. Sorry, Cathie
At the moment, this is all very confusing as I am just starting to pick up from my family members before me who also did not know a lot about mineral/land ownership. I am afraid they most likely signed a crappy lease deal many years ago, so I would say understanding the lease agreement would be the most challenging right now. I am slowly learning how to do an audit of previous years as none of my family have ever done so. Think the last time they ever paid to do an audit was over 15-20 years ago.
Thank you Alice. I have been wondering about that.
Understanding Division Orders Understanding Lease Provisions Understanding Pooling Order Process Valuing My Minerals for Leasing Communicating with Oil/Gas Companies
For those of you who have minerals in OK, the Oklahoma Corporation Commission is a font of useful information. Here is a handy booklet from them. 0_Royalty-Owners-Booklet-112020.pdf (6.8 MB)
Other states may have similar ones.
The National Association of Royalty Owners is another good resource. www.naro-us.org. They have chapters across the US in the major oil and gas producing areas. They offer mineral management classes, webinars, town hall info meetings, conventions, networking opportunities, etc. for mineral owners. They have an introductory rate of $75 to join. Richard has given some very good session talks during OK conventions.
Communication with the Gas leasing company. Never a human being to answer a phone call. Also, understanding law and legislation in Ohio and the MTA. What a mess!
I didn’t take the poll, because, to me, the most challenging aspect is the total lack of transparency. For instance, multiple wells are drilled, some in areas in which one has royalty interest and some not. The group of wells is categorized under a single lease number and the production is reported to RRC by lease, so no way to check production numbers against what is reported on a division order. To further complicate the issue, the same group of wells is “unitized”. The production company lists a single entry on the DO for Unit X. Then you receive a revenue report and it does not show Unit X, but instead shows Unit X TR 2 and Unit X TR 3. Unit X has a NRI on the DO, but the others do not. One can find a legal document that defines Unit X, but cannot find a legal document that defines Unit X TR2 and Unit X TR3. A request is made to the DO analyst for an explanation and the request is ignored, even after a certified letter. Then one receives a tax statement and Unit X TR 2 and Unit X TR3 both appear twice for the same period of time. And, a brand new lease number appears attached to the entries.
I am surprised that mineral owners have not banded together and insisted that a law is passed requiring all reporting be done by well from the Operator, the DO, the revenue statements, through RRC, Pritchard & Abbott, the Centralized Appraisal Districts, utilizing the API well number from the RRC site.
I understand your frustration as the learning curve can feel daunting. The API number is the wellbore. Over the life of a well, the RRC Lease number can change. It is originally assigned as an oil well (5 digits) or a gas well (6 digits) in a certain field. If the operator applies for a field change, then a new RRC Lease number is assigned. Or if the well classification is changed from an oil well to a gas well, even within the same field, then a new RRC Lease number is assigned. If a well is recompleted in a shallower formation, then a new RRC lease number is assigned. Some deep vertical wells are completed in two different formations (eg Fusselman and Devonian) and the same wellbore will have two different lease numbers and the volumes from each formation will be reported separately. You can trace the history for each wellbore on the RRC website under Wellbore Query by entering the API number and selecting “Both” instead of just current. That will take you to links to scanned data in RRC records, which can be 100s of pages over the years.
For me, as the year’s go by I try to keep learning. The more I learn the more I understand that I don’t know! Most of the time lease brokers try to keep you from talking with the company.
Well I thought I was keeping my post business like. Guess I appear more frustrated than I am. If I have offended anyone, I apologize.
I have observed that all of the more recent wells drilled by my operator are one well per lease, which I believe is a huge step in the right direction. I have also observed the original lease number still appears on the records that show a new lease number, just not where the lease number is on other records, so easy to miss. Production companies have to track statistics by individual well or they would have no way to know when rework is in order or a well should be shut down due to negative cash flow, so why not report by well? Think of how much confusion and customer interaction could be avoided if reporting were more transparent and individuals could cross check their numbers themselves? Wouldn’t if make life easier for Landmen and O&G Attorneys?
One of the things I failed to mention in my post is that I am a NPRI owner who inherited. No lease broker involved with me.
I complained to my production company before I signed the DO that it was incomplete. They ignored my complaint and insisted I sign the presented DO, which I ended up doing. In the 2 months since I signed the original DO with 55 wells, they have issued addendums to add about 30 more wells, some as a result of certified letters. I had sent the manager of the DO analysts (before signing) a list showing the 113 wells that should have been on the original DO, only to receive a response that if I wanted additional revenue, I would have to prove everything from sovereignity forward. She copied a company attorney on this (intimidation attempt?). I wrote the attorney and expressed how disappointed I was in the response I had received and pointed out there was a single Royalty Deed from 1950 that my mineral interests were derived from. I pointed out that if her company was honoring that deed on 55 wells they were legally bound to honor the claim on all wells drilled on or into the defined area. That led to the addendums.
Perhaps the most frustrating thing to me is when someone says “It’s complicated”. Most people I encounter seem to accept the status quo and have no interest in process improvement. Of course my perspective is different, because I spent my entire career analyzing systems and looking for improvements.
Clearing a title and royalties in suspense. Collecting Royalties escheated…OK treasury says Devon has to recall funds escheated in error, Devon says they won’t do it because the info on owners they had at the time they felt was correct.