I received DO for (3) Wells early last year. I started receiving royalty checks around middle of the year. My question is: First two checks were larger than average I expected that. But there after, it appeared that the amount continued to decline month after month. Does this mean that the wells are not producing as expected or are they tapering back on drilling? Seems to be alot of activity in our area Township: 16N Range 63W Section 18
Wells naturally decline, especially shale wells which decline very steeply over the first 12-18 months.
You can track production on the WOGCC website.
Your first check is usually for several months of production, so that can be the largest you get. Sometimes, the second one may also be fairly large depending upon how many months are in it. Wells decline naturally and steeply over time. Also prices have dropped over the last few months. The normal shape of a decline curve for a horizontal well is often called a “hockey stick”. The first few years are the blade and once the steep decline levels off, the wells can last decades at a very low rate which is the stick.
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