Hello All,
I am familiar with ORRI payouts as I currently have leases in Midland County. Now I have a new one coming up that appears to be a Working Interest type. What should I expect as the main difference and should I try to renegotiate an ORRI for this instead? If so, then with who would I start that process? There are 6 new wells just being spud at this time on the new lease. Any help is greatly appreciated as a WI is new to me and I know it can be a minefield for older folks and the overall burden of taxes and things.
What do you own? Minerals under a lease or minerals which are unleashed or an NPRI? Or do you own leasehold rights to under a lease of someone else’s minerals so that you are a working interest? Have you been sent a AFE for a proposed well? How did you get an overriding royalty? Some operators have offered overrides to small leasehold owners for a term interest in the lease for easier operations?
Hello again TennisDaze,
Thanks for the reply. Not sure what all you are asking? I Think this is what is happening, I will quote you “Or do you own leasehold rights to under a lease of someone else’s minerals so that you are a working interest?” I am not sure though and no I have not received an AFE. As far as all of this, it was inherited. One part was sold with an ORRI reserved. That is what is currently paying royalties.ORRI reserved on, Blk37, T5S, Sec5. 18.36% @ 1/16 of 7/8 of SW/4, SE/4, minus 40 acres in a square in the SE/4 of the 228 acres with a reduced Total to 188 acres Midland County TX. All others appear to be WI holdings from this inheritance. The area in question is 228.57 acres of Blk 37, T5S, Sec 4, SW/4, SE/4 Midland County TX. I am now informed that I have 18.36% of that. I have notified Pioneer of all conveyances and they have responded so far that it is still at spud stage and until it is producing, no DO will be provided as it is not at that level yet. Please elaborate on what I need to get to you? I currently have an Attorney and a Land Man involved as well. I am just making sure I understand what they are saying as well for direction. I know that WI requires that I will have cost involved for many key things, such as oil transportation, maintenance, liability and much more. These costs, I do not have with my current ORRI. Also these are
all allocated wells, not pooled.Thank you in advance again, Sincerely, MK
Your attorney and landman can best help you read and understand all your deeds and assignments and understand exactly what you own (minerals, overriding royalties or working interests) and what your options are. They should be able to guide you to some publications and materials which will provide explanations. Consider joining NARO (National Association of Royalty Owners) which has links to resources and holds state and local conventions and on-line seminars. It takes time to learn about minerals, wells, operations, etc., but that is worthwhile. View this as a journey of discovery.
@tennisdaze, thank you Sir, I appreciate your honest thoughts on this. I meet with the land man Monday to discuss all the docs with him after his week in Midland, then it is back to the Attorney. I was trying to get a leg up so to speak about questions I may have with some knowledge behind those questions. I will consider the NARO option, You and many others here have increased my knowledge so much in the past year I feel I can at least now ask a somewhat intelligent question, for that I thank you and the many others here.
Thank you again for your help and guidance.
Sincerely,
MK