Just wondering if seasons have a direct effect on well production. Obviously the season i am referring to is the ridiculously cold winter we are having. Production numbers (or at least sale) seem to be trending lower than warmer months. Perhaps it is due to transportation being hampered during inclement weather? Any thought? Just bored and stuck in the inside during this terrible frozen hell.
This is my first year getting Royalty checks but noted the check gotten 2 days ago is slightly higher than the previous month. 1/2 what it was 6 months earlier but still slightly higher in Dec than November. Like yourself I wondered the same thing. Who knows about the balance of the year though
My next question is....what info is sent out for those obtaining royalty checks in order to do 2013 taxes as I have not seen diddly at this point in time.
Mr. Starkweather, you should receive a 1099-miscellaneous. Do not forget to take the 15% depletion.
T,
I can only speak of the little i know to date regarding taxes. This is my first year as well. (No pun intended) My family has formed an LLLP and my accountant has informed my that paperwork should arrive (and has from one oil company) associated to the K-1 form you need to file. Until this is received you cannot file properly. The information they send is essentially their equivalent of a W-2 for the year. Atleast this is my understanding. Others who have filed in the past will know a lot more. Note* K-1 may only be associated if you have an LLLP. Not sure.
The other thing to note is that i am out of state, so the LLLP must pay into ND my personal taxed income 3.99% and then I owe the difference to my state.
Hope this helps!
All of this was new to me within the past few years. Actually receiving something now means until the first go-around, it'll be an interesting journey. Unaware of how to take the 15% depletion R.W., any additional thoughts or where to look to do so will be appreciated as in the past as you have a wealth of knowledge you've already shared to others besides myself. Certainly doesn't come from Continental in my case....ha!
There should be a line below where you enter your earnings, where you enter your credits. It's been awhile since I did it myself as I have found someone who does my federal and ND state income taxes for $95 total.
I hope you don't mind if I attach my question to yours. I too was wondering about the change in production/sales in the last three months. Besides the bad weather, Petro Hunt has also added well number 2 on our site (4-159-94) which comes off confidential 03/15/2014. I do not know if they stop producing when there is another well being added. I also heard that the oil from wells on the same pad is in combined storage, and since they do not pay on confidential wells does well 1 just sort of get sucked into well 2's production? They have applied for permits for wells 3 and 4 a couple of months ago and don't know what progress there is on those. Anyway, I am sure the horrible weather is a big factor, and it is a great thing that they are adding wells, but not much seems to be happening right now. I am sure those of you that have been involved for quite some time know how the process works. This is just our first few months since well 1 came off confidential so don't know the process yet.
Gail, to start, bad weather probably is playing a part. The first well was not paying because they don't pay on confidential wells but because they were checking title .....again. All sales of oil are reported to the state and are public information to be found in General Statistics on the NDIC O&G site, nothing to be gained secrecy wise by not paying. Gail, if they only just drilled the wells, they may not be fracked / completed. The frack gel, it's already a gel before they pump it down will freeze and they literally have to add lots of antifreeze or hire heater trucks in the winter to keep the frack fluid from freezing and that's expensive. I had two wells drilled in November of one year and they were not fracked / completed until 9 months later.
Your first well could be shut down as a safety precaution when they frack the other well/s because they may not want to frack into and "kill" their own well which will probably start again after all the water flows back, but sometimes not.
I have a spacing that had 2 wells and the operator drilled two more wells and the operator was sending me payment for all 4 wells within 2 months of the 2nd pair of wells producing, because all of the title work had been done and settled from the first two wells. I believe there is probably a regulation somewhwere that says they need to pay 60 days after sales [ month to month, not the 150 days after first sales or they owe interest ] for oil and 90 days after sales for gas. I believe this because that is what is usually on my checks and I frequently have adjustments on the gas and I don't think they would have sent more than they had to, if they didn't have to and then correct in later months for marketing costs.
Gail, you are fortunate to get the infill wells so soon, some people who have only one well will be waiting a decade or more for their second well. I'm going on six years now with 1 well in each of 5 different spacings, infill drilling all around my spacings but none in them, possibly because of lawsuits. I hope this helps.
RW,
Since I am a dummy. Can you explain “Infill” well type? Not sure how this differs from others.
RW, again thank you for the great information! I had read somewhere that wells were usually not completed in the winter. That must have been a reference to the fracking problem in cold weather. The payment on the first well did not come until well after a year from the time it went to confidential and began producing because of "title" issues. They paid the back months and one other and then dropped back to nothing because the payment would have been less then $100. One of those months nothing was sold, one a small amount, and am still waiting for production reports on December. The date published for the second well to come off confidential status is March 15. I was hoping that meant they had gotten it producing in October but I guess we will see.It never occurred to me they would also hold up on the second well to check all the same title work again. I was very surprised that they are planning to put in two more and it will be great if they complete them. My 92 year old aunt died this summer but lived long enough to know they had completed the first well. The mineral rights have been in my family for years and it was something my aunts,uncles, and my mother, told us about as we grew up. At that time it was highly unlikely much would ever come of them. My aunt always believed it would be important some day so I'm glad she saw that. Even though our individual acreages are pretty small it's just fun to own a part of an oil well.
r w kennedy said:
Gail, to start, bad weather probably is playing a part. The first well was not paying because they don't pay on confidential wells but because they were checking title .....again. All sales of oil are reported to the state and are public information to be found in General Statistics on the NDIC O&G site, nothing to be gained secrecy wise by not paying. Gail, if they only just drilled the wells, they may not be fracked / completed. The frack gel, it's already a gel before they pump it down will freeze and they literally have to add lots of antifreeze or hire heater trucks in the winter to keep the frack fluid from freezing and that's expensive. I had two wells drilled in November of one year and they were not fracked / completed until 9 months later.
Your first well could be shut down as a safety precaution when they frack the other well/s because they may not want to frack into and "kill" their own well which will probably start again after all the water flows back, but sometimes not.
I have a spacing that had 2 wells and the operator drilled two more wells and the operator was sending me payment for all 4 wells within 2 months of the 2nd pair of wells producing, because all of the title work had been done and settled from the first two wells. I believe there is probably a regulation somewhwere that says they need to pay 60 days after sales [ month to month, not the 150 days after first sales or they owe interest ] for oil and 90 days after sales for gas. I believe this because that is what is usually on my checks and I frequently have adjustments on the gas and I don't think they would have sent more than they had to, if they didn't have to and then correct in later months for marketing costs.
Gail, you are fortunate to get the infill wells so soon, some people who have only one well will be waiting a decade or more for their second well. I'm going on six years now with 1 well in each of 5 different spacings, infill drilling all around my spacings but none in them, possibly because of lawsuits. I hope this helps.