I have not received royalty check for April, 2024. Received the May check. Has any one on these wells not received their April checks. I have talked to a person at Contango and just gotten the runaround. Thanks for any and all help. JamesC.
Hello Martin - I got the runaround as well, but finally got an answer.
Here was the answer: “THE OWNER DIDN’T RECEIVE PAYMENT IN APRIL DUE TO SOME PRIOR PERIOD ADJUSTMENTS MADE BY CONTANGO WHICH RESULTED IN A REDUCTION IN PAYABLE ACCRUED REVENUE FOR OWNERS IN CERTAIN MIDCON/UNCONVENTIONAL WELLS DUE TO A 2021/2022 OVERPAYMENT. CORRECTIONS TO JUNE 2022 REV WERE FOR DISBURSEMENTS BEING DOUBLED OR TRIPLED IN ERROR, AND CORRECTIONS TO DEC 2021 - OCT 2022 DISBURSEMENTS WERE CAUSED BY INCORRECT VOLUMES AND PRICING ERROUNEOUSLY INFLATING OWNER REVENUE. THEY WERE ISSUED PAYMENT IN MAY ON 5/28.”
My statement in May, 2024 was 22 pages long versus the regular 3 to 4 pages I normally receive. All due to these adjustments.
These sorts of adjustments happen. If it makes you feel any better, I just got a statement from another operator that was 799 pages long full of adjustments for years. That will take a while to doublecheck.
Martha -
Thanks for the info. Well, that is concerning.
I realize prior period adjustments happen, but why isn’t this caught within an operating year versus 3 to 4 years back?
And next question is how are you checking all of this and for what - accuracy, volumes or ?? Any tips to check these adjustments are helpful.
Thank you!
The adjustments can happen when meters are found to be faulty, title was found to be in error, a wrong price deck was used, accounting software glitch, an internal audit or many other reasons. Sometimes happens when one operator buys another, etc. Sounds like yours was an accounting mistake and pricing. Sometimes, it takes years to catch some of these. Most mineral owners do not have access to the pricing contracts, so hard for us to know exactly what happened.
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Andy2 and M Barnes, Thanks for the help. James M. Caldwell
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