Hello! Thank you for your review here. The county forum is a good place to learn.
My question to you: does anyone know if wells are being capped, or drilling delayed, or are your well(s) producing (and troyalties received)? Any opinion looking ahead?
EX: A coworker said his friend had his well capped in Fayette Co., PA. It was estimated to pay him $30k/month in royalties. Production is not happening under current market conditiosn (thus no royalties).
EX: Are wells producing but not going to market (hence no royalties)?
Some contracts, I understand, were hedged at prices better than current prices.
Also, are state/federal taxes typically deducted from royalty payments?
THANK YOU for your comments.
About the last: I have seen West Virginia state income taxes deducted (withheld) from the royalty payment and reported as such on the 1099. Not required I believe under WV law.
Hope others have information about your questions.
I have a small interest in the Dotson Well, in Doddridge County, this well started producing in "Aug. of 2013", learned yesterday from Denver the following> Yes this is a old well, and the Div. Order should be sent out sometime in May, however Royalty payment won't be made for at least a couple of months after that, no explanation as to why so long after producing. I also checked on the Piggot Well, Hardin well, Amanda well, the answer I got was " call back in a couple of months". All of these wells mentioned are Antero wells and my take on this is Antero is trying to put 100 lbs of fertilizer in a 5 lb bag, in other words they have two much on there plate. I do have 4-wells producing and I am receiving royalty, however I am taking a hit from the first checks to my last check,
Thank you for prompt replies Nancy and Arnold. I appreciate all of your input here in the forum!
Nancy, I assume the state is consistent in taxing royalties before the check arrives. But, if not, the 1099 from the payor would reflect any income to be taxed that the state misses. Thank you.
Arnold, hope that Utah sun is warm today. When you write 'taking a hit' is that per the market price of gas declining from say $4 to about $2.60/MCF?
Loo forward to others thoughts.
Ancel, generally in my experience the royalty check has no income taxes withheld. You pay them the next year on previous year income (in 2015 pay on 2014 royalty income) but since some states (e.g. Oklahoma and Pennsylvania) may require state income tax be withheld, a company doing a lot of drilling in one of those states might just withhold WV state income taxes on its WV wells even though WV does not require it. Always set aside part of your royalty income to pay in federal and state income tax. At least that is how I understand it. Otherwise it might be a big bad surprise!
Ancel Smith said:
Thank you for prompt replies Nancy and Arnold. I appreciate all of your input here in the forum!
Nancy, I assume the state is consistent in taxing royalties before the check arrives. But, if not, the 1099 from the payor would reflect any income to be taxed that the state misses. Thank you.
Ancel, I believe that Antero is holding back on the amount of gas (to market) because of the price of Nat'l Gas, but truthfully, who really knows, Antero does have a hedge fund, that's why they are still paying in the 3.00+ range not 2.60. Nancy, Ancel, I have been paying Estimated taxes based on 1099 from last year, so I bleed quarterly, but sure takes the heat off in April. If you don't try to hide the $ and and save, save some of that Royalty for taxes, you won't get hurt, so far I have not had to file for Chapter 11 (Ha, Ha.