We have a Marcellus well that has been in production over a year. Is it common for companies like EQT to take that long or longer to pay a royalty? They were real interested in getting us to sign on the dotted line, but as far as getting paid is concerned, that seems to be a different story.
Did you receive a division order yet?
No we have not received a division order yet.
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That has to happen first. They might be still figuring it out. Ideally they would have done that before drilling. I have heard that sometimes it takes 18 months from first production to first payment.
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I have several wells by Antero and they all took 6-12 months after production started before I received a Div.Order, however , after receiving my DO payment started the following month.
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Remember that a division order is not required by law unless it is written into your lease. They are basically just evidence in the event that they are sued where someone contests the money paid. The good thing about them is that you get to see the percentage they are paying you and then you can do your own calculations to double check. Over many years with many leases to Antero, they have never been off, although it doesn’t hurt to double check. Especially with other companies. Just from personal experience, EQT starts paying about 6 months after production and Antero is about a year, sometimes a couple months sooner. I believe that after a well has started to produce and they have determined it is a good well, they then do a final title exam to determine your exact percentage in the well. Antero will also send you a check later to cover any interest you have lost from the late payment.
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Thanks for your response.
Jim,
Respectfully, I disagree with you. I believe you will find that WV passed a law in the 2018 Legislative Session that requires Division Orders and sets specific guidelines as to how quickly a royalty must be paid, after sale of production. Additionally, there were regulations included that required interest to be paid on any royalty not remunerated within the time frame set forth.
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WV Mineral Owner, I didn’t know about that even though I try to keep up with things. Thank you for the update. Do you know if this new law is retroactive or just for wells drilled after the law went into effect?
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Smirks, Tiz unusual for me to know one that you did not know. Dear Diary… Hehehe
I do not have the bill in front of me, but it was SB 360, passed in the 2018 Legislative Session.
Haha! I remember that there was such a bill but not details. I need to read the fine print. Always fun!
Interesting. Do you have the bill on the Division Order requirement? I just spoke with my attorney about it and he said it was not required (I have 2 sitting here that I have not signed for various reasons and we are getting paid). We are both probably wrong. They do have to pay within 120 days of the first sale, but they so far have not. Antero has always paid the interest to us, as has EQT.
I believe SB 360 only applies to flat rate leases. Am I missing part of this thread? Think I’ll just keep quiet…
Nancy emailed me just now and told me to shut up!! and I will…
Jim,
I may be wrong in the specific Senate Bill number, but there was a SB that included the Division Orders, payment requirements and interest rate for late payment.
The Nancy I know, would have only made any suggestion of shutting up, in jest. Please do not be offended by her comment, I am certain it was meant in a jovial manner. I would hate for Nancy to be banned by the Moderator for being a bully, she is an extremely valuable member of the site with the greatest knowledge in my humble opinion, I have great respect for her input to the site.
Respectfully, WV Mineral Owner
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Calm down guys! It really is hard to find the oil and gas laws. I just found something about the severance tax of low producing wells not having to be paid. We have a dispute with one operator about severance tax. Maybe I need to tell him about that bill. Or maybe I didn’t read it correctly. The bill number cited by WV Mineral Owner was for flat rate wells. All important. We need an interpreter for these things.
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Have you called the company? I would also call the Oil and Gas Association in your city. Or in your State. Joestock
Don’t worry Mineral Owner, the moderator will not ban Nancy, as you can’t ban perfection.
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Do you have a friend that is an attorney? If so, sometimes that is all it will take. And I would call the State Attorney’s office and ask that same question. And call the Better Business Bureau to discover their analysis and to see if there are multiple complaints on this company. JMB
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Arnold you really know how to flatter! And you don’t know how much I still don’t know haha. Keeping up with the legislature is something I am not so good at. I do know however that sometimes a company will try to put language in the division order that changes the lease. I had it happen once but had been forewarned, and sent them my own division order, copied from the Model Division Order link I had posted. They accepted it.
LOL…Nancy and I are friends outside these groups. I was trying to goad her and make her a little crazy. Never seems to work. Not sure either about the division order, but I have been lucky enough to have received several over the years. I have gotten them where there were horrible clauses in them. Some have actually tried to change the terms of the leases. Drillers may have to send them, but in order to force us to sign them, there would have to have been a HUGE amount of talk about what language was required/allowed in the orders and I did not see any of that discussion. If you check Kyle Nuttall’s website you will see an article about DO’s and the last line states you can throw them into the trash. That is probably an older article, so not subject to any recent changes. still…