Forum Discussions - Mineral Rights Forum

Midland Reporter-Telegram///Developmental, Completions and Wildcat Wells for May 20, 2018

2018-05-20T14:00:27.298Z

https://www.mrt.com/business/oil/development_wells/article/Development-Wells-for-May-20-12926648.php

https://www.mrt.com/business/oil/completions/article/Completions-for-May-20-12926654.php

https://www.mrt.com/business/oil/wildcats/article/Wildcats-for-May-20-12926645.php

Old original Texas oil lease questions

2018-05-19T23:38:46.485Z

Hello,

I am new to this forum, my goal is to piece together what has become fragmented information across the family in terms of oil wells, leases and royalty interest. I read in other forum posts that when a new well is drilled many times the original lease and terms of that lease is used and a new lease is not required. In my case my great grandfather and great grandmother signed an oil and gas lease in 1976 (Clayton Williams). I believe it was about that year when 3 Vertical wells went up on the property. In 1979 my great grandparents deeded my grandfather, father, and an uncle mineral interest in the amount of 1/6 each and my great grandparents kept 3/6. In 1990, another uncle of mine was deeded 1/6 mineral interest and my great grandparents now kept 2/6. Then, in the later 90's my great grandfather and grandmother deeded their remaining mineral interest (2/6) to be split evenly to their 6 great grandchildren. In 2003, original lease rights became owned (sold I guess) to another company I'll call 123 and company 123 had a horizontal well pooling amendment drafted to amend the original lease and my grandfather, father, two uncles, and all 6 great grandchildren were each asked to sign this lease amendment.

If anyone could answer, I am not sure if we all signed a company 123 lease amendment in 2003 because a re-entry horizontal well was beginning or if it was because their were many new family members that now held interest since the original lease was signed?

If anyone knows, fast forward to 2017, a new company stood up a new pooled horizontal well on a neighboring property, this pool uses all of our land, and no amended lease or new lease to my knowledge was requested to be signed, is this because the original 1976 lease and/or the 2003 lease amendment (with horizontal wording mentioned) covered everything that would be needed?

Thanks to all,

Larry

Pallas Energy

2018-05-19T18:30:37.343Z

I signed a lease with Pallas Energy back in 09/2016. Just recently found out EOG put up theTonkawa unit a few miles away on Stokes rd, My property is located in the corner of Austin, Fayette and Colorado County in Frelsburg. Does anybody know what the outlook is. My neighbors also signed up with Pallas. Thanks,

Dumas, Texas Oil and Gas News///April 30-May 13, 2018

2018-05-19T16:17:43.087Z

http://highplainsobserverdumas.com/index345.htm

Abilene, Texas Oil and Gas Report/May 19, 2018

2018-05-19T16:14:02.321Z

https://www.scribd.com/document/379593035/0519-Oil-Report

Need Assistance Retaining an Attorney

2018-05-18T20:43:24.676Z

Hello all, thank you ahead of time for your help, I will try to make this as succinct as possible.

In September 2017, I signed a lease on mineral rights that I never knew I had, that were passed via my father in Jefferson County, Ohio.

A few months later I get a call from the company, saying there was a problem, because the surface owner had filed an abandonment a few years prior. They recommended I find an attorney because they were able to find me "in a few hours".

I never did receive a certified mail, but I did see a copy of the newspaper ad their lawyer put out looking for me. (misspelled name in it btw)

So I hired an attorney based upon the recommendation of the people I signed my lease with, and paid lots of bills, only to be told they were "uncomfortable" taking the case, because they were currently representing a lot of surface owners in the same courts.

Is there anyone who could advise me on what to do next? I need a new attorney now of course, but this whole thing seems very difficult to navigate.

Just as a side note, I signed a lease on other mineral rights for a second property in Jefferson County and I have been paid, that one is all clear, no problems.

Rapides Parish O & G Lease

2018-05-18T17:12:50.415Z

I received a letter of interest from Petro Guard in Houston to lease our minerals in Rapides Parish southeast of Glemora. They offered 3 yr. with additional 2 yr., $500/net min. ac., and 1/5 royalty. Does anyone know if this is in line? I am not aware of any activity there at this time. Thank you.

Craig Hughes

easement

2018-05-18T11:50:52.592Z

Greetings; Jetta wants a permanent easement for a water line in Ward County 183 and is offering $120 a rod. I'm wondering how that figure compares to other offers. Thanks much.

Grady and Roger Mills counties , ok.

2018-05-17T22:41:11.118Z

Landmen and others, Im wondering what is going on in sec 31 7N5W Grady county.there seems to be some activity there. Also, whats with Roger Mills county in Oklahoma? It used to be a hot area. Can they not horizontal drill and frac in that environment?

I would appreciate any info someone could give to us. Thanks, Ann

Texas Severance Taxes - Gross Sales vs Net Sales

2018-05-17T03:24:51.814Z

Question was raised about the calculation of gas severance taxes. Here is what you need to know. Gas severance tax rate is 7.5%. If your gas is sold at the well, then the severance tax rate is 7.5% of gross revenues. This was most common when gas was sold to the pipeline company. For example using easy numbers. If the gross sales is $1,000, then the severance tax is $75. If your DOI is 0.0100, then your royalty is $100 (being $1,000 X 0.0100) and your share of the severance tax is $7.50 (being $75 X 0.0100). Therefore, your net royalty payment is $92.50 (being $100 less $7.50)

These days, most operators pay a transportation fee to the pipeline company and send the gas to a gas plant for processing. The gas is then sold at the tailgate for a higher price than the wellhead price. The Texas Comptroller allows the oil company to deduct "marketing costs" from the sales revenue at the tailgate (or other sales point far away from the well). This is to make the severance tax system more even between companies which sell at the well and those which sell at the plant. The Comptroller's Natural Gas Tax Guide of 2009 defines Marketing Costs as "allowable expenses incurred by the producer in getting the gas from the wellhead to market. They include the following:

(1) Cost for compressing the gas sold;

(2) Cost for dehydrating the gas sold;

(3) Cost for sweetening the gas sold; and

(4) Cost for delivering the gas sold.

To calculate the severance tax on gas sold at the plant. Assume that the oil company has gross sales of $1,300. It incurred gathering costs of $50; transportation costs of $50; compression costs of $50 and plant processing cost of $50. For severance tax, the $1,300 gross sales is reduced by $200 (the total of costs) to be $1,100 and the severance tax is $82.50. With DOI of 0.0100, the royalty is $110 (being $1,100 after costs X 0.0100) and the severance tax is $8.25 (being $82.50 X 0.0100) - your royalties will be $101.75.

So if the oil company is deducting costs against your gas royalties, then the severance tax should be calculated against the NET SALES REVENUE. If the oil company is charging the 7.5% severance tax against the GROSS SALES REVENUE, then you are being overcharged. You need to contact the oil company and ask for a refund. Many years ago, I found severance tax being charged against gross sales instead of net sales and called the major oil company to protest and get a refund. They told me that it was a programming problem, but did send a refund. However, the company was overcharging tens of thousands of royalty owners. At the same time, a different department was properly calculating and paying severance taxes on the lower net sales revenues.

As a royalty owner, you are responsible for reviewing your check detail to make sure that the correct DOI is being applied to the revenues and that the severance tax is correct. Learn to use the Texas Comptroller CONG website to see the gross sales for both oil and gas that is reported to the State of Texas and compare to your check. You can also look to see if the gas well has been granted a lower severance tax rate because it is a "high cost gas well" or is exempt from gas severance taxes because the well has very low production coupled with low prices. Another large oil company charged severance taxes on wells which were exempt from severance tax under the rationale that it averaged the total severance taxes for wells across the state and charged all wells at the same reduced rate. This did not average out for us as all of our wells were supposed to be at -0- rate. We got a refund of the overcharges.