Why would the royalty interest amount be different on four wells in the same two sections? also I have a hard time understanding the check stub paperwork, very confusing! Thanks for any input.
If you give the location, ie section, township & range, someone here can get you the answer you are looking for.
section 36-10-5 in Grady County and It runs through section 25 also.
You have several different horizontal wells. Each has a different length, so a slightly different percentage in perforation amounts for each well. When the wells were permitted, they may have had an estimated split of 50% in section 36 and 50% in section 25. But actual drilling and final perforations will give a final split that may be different. You should have received a final order from the OCC addressing each well(s). For example, the EOG Resources well Galaxy 2536 1H final as-drilled order is Case 201804428 Order 699323. The splits are Section 25 with 50.73761% and Section 36 with 49.26239%.
The royalty equation that is used is: net acres/actual spacing acres x royalty x % perforations in your section. The spacing here is 640 acres and the sections are actually 640 acres. You should know your net acres and your royalty and the OCC gives you the final splits, so all the terms are available.
Reading check stubs can be a bit confusing, but once you get used to it, you can figure it out. Which companies are you getting them from and I can walk you through one of them to give you a clue to getting started. Don’t post the stub, but give me an operator name and I can help you orient your eyes.
Thank You for the info, The operator is EOG Resources, If you could walk me thru it that would be great!
The formula is as follows: Your net acres, divided by 640.00, times your royalty percentage,times the percentage of the wellbore in your section. The division order for each well will tell you the percentage that Section 36 has for the unit. As Martha shows above, the Galaxy #1H wellbore has 49.26239% of that wellbore in Section 36. You can fill in the rest.
Hello, this is my first post and I also find myself confused trying to decipher the pay stubs. I have received my first royalty payments last month from mineral rights I inherited in April, 2019. My minerals are in Hughes County, OK, Sec 28, 7N, 10E where Trinity has drilled the Dora wells. They have been leased since 2013 with agreement that the owner receives 3/16 royalty. I have never received a division order so I don’t know the percentage of the wellbore in my section. Can you help me determine if I am receiving the correct payment? The first production appears to be Dec. 2018, so may I also request interest?
Stephens county 26-01s-04W is anything
26-1S-4W- What is your exact question?
River: You need to contact Trinity to find out why you aren’t in pay status. In Oklahoma, it is not necessary to execute a DO to be paid. Send them a letter with your correct contact information along with an executed W-9. If your title is marketable as per Oklahoma statutes, they will put your interest in pay status. If there is a problem with the title, they will let you you know what you need to do to get into pay status. Hope this helps.
Here is the page from EOG Resources for how to read your statement. Work through it from A, B, C, etc. and it shows you how to read it. See if this helps. EOG royalty_check_detail-updated.pdf (4.8 MB)
For anyone else who is confused but has another operator, go to their website (if they have one) and look under Royalty Owner, Resources, or some similar name and they probably have a similar example. Once you learn how to read one, many are quite similar. Many states have very specific statutory requirements of what should be on the statements, so that helps. (Then there are some statements that are just awful…but look at the good ones first and you get your eyes trained for what to look for on the awful ones.)
Be sure and save your statements for seven years for IRS purposes!
Thank you so much for the info!
As you may have heard from other contributors it may have to do with the type of unitization formula used by the operator. Historically all of the lands where pooled into one unit and each well inside the boundaries of that unit would be given the same proportion but recently operators have begun using a well bore allocation method which designates interest based on a particular’s tract contact with a specific well bore. If you would like to have a walk through of your particular circumstance feel free to reply to this message and we would be happy to show you.
In Oklahoma, the unitization order agreement documents determine the proportion amount granted to each mineral tract, so the above statement that each well is equal would not be correct.
Other states would have their own rules.
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