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Hello Marsha,
Let me first say how glad I am to have stumbled upon this site.  I have been able to resolve a few (of many) questions that are pounding in my brain.
I have recently become the owner or Royalty Interest in Madison County Tx.  I have no experience with this at all and am trying to learn as fast as I can.
In August of this year I received my first royalty check (4 figures) and was quite pleased with it.  I noticed that this payment was an accumulation of a couple of years of RI that were never claimed by my recently deceased relative.  Upon receipt of the check, I called my Division Order Analyst to ask if there was the possibility of any more checks to come.  I was told that this was back pay and not to expect anymore checks like this.  Fast forward to September and I received a check that was well into the five figures.  I made the same call and received the same answer.  It was quite a let down, but I couldn't understand how 5 of the wells (all giving 5 figure payments) were from July 2014.  I then looked at the RRC site and noticed that the well(s) permit/application was only filed in April 2014.  Best I can tell, this is it's first month of production.  Sorry to go on so long, buy my question is, "What am I missing?"   Wouldn't it be reasonable to think that a well should produce for more than 1 month.  And if so, is there any average length of time or amount of production that might help me understand where this may or may not be going? Any help would be greatly appreciated.

Answer
You are somewhat cryptic with information surrounding your new ownership, so I'm afraid there is little help I can provide. I need to know first if that first check you received covered production from one or more than one well. Then I need to know if the next "five figure check" you received was for the very same wells, or from a new well drilled that began producing after the first check was received (perhaps the well issued a drilling permit in April 2014?). Horizontal wells in Madison County typically (but not always) produce heavily for the first 6 months or so, then begin to drop off their production rates fairly sharply after that. This is the nature of shale formations. I think what may have happened is that your division order analyst did not have all of the facts before discussing your payments with you. It does occasionally happen that a new well will encounter production problems soon after beginning to produce, such as "watering out".  This could explain a one-month production payment. Or perhaps the well is being reworked and won't produce again until that work is finished.

What I recommend that you do is to call the company back, but this time ask to speak to the Operations Engineer handling Madison County, Texas. Ask the Engineer to explain the current status of the well, and the company's expectations for its future production. The division order analyst typically does not have real-time access to this information because it isn't needed for the work they do. Going directly to the source by speaking to the Operations Engineer should get all of your questions answered fully concerning future well production and royalty payment expectations.

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Marsha Breazeale, M.Ed., CDOA, CPLTA

Expertise

All questions regarding division orders; ownership decimal calculations; title ownership and payer record changes (testate/intestate inheritance; deed; assignment; court order); oil and gas lease analysis for record-keeping and purposes of payment by operator or payer; pooling, horizontal wells, horizontal well allocation units; unclaimed property reporting; royalty owner relations questions. All questions concerning administration of surface land contracts and payment questions, such as for Surface Right-of-Way, Sub-Surface Right-of-Way, Easement, Surface Use Agreement. All questions regarding industry-standard and company-specific policies that affect land owners.

Experience

Sr. Staff Division Order Analyst. Certified Division Order Analyst (CDOA, National Association of Division Order Analysts) and Certified Lease Analyst (CPLTA, National Association of Professional Lease and Title Analysts) with 35 years of experience as a combination division order analyst and lease analyst in exploration and production in the oil and gas industry.

Organizations
National Assoc. of Division Order Analysts (NADOA), National Association of Division Order Analysts (NALTA), American Association of Professional Landmen (AAPL), American Society of Trainers and Developers (ASTD)

Publications
"How an Oil & Gas Exploration & Production Company Operates" and "Principles of Oil & Gas Lease Analysis: Standard Clauses", Oil Patch Press; Articles in NADOA Magazine; LandFocus EDU Professional Training Manuals

Education/Credentials
B.A.in Management from Our Lady of the Lake University in San Antonio; M.Ed. in Instructional Design from WGU Texas.

Past/Present Clients
Past 15 years: GeoSouthern Energy Corporation; Contango Oil Co./Crimson Exploration & Operating Inc.; Apache Corporation; BP America; Marathon Oil; Newfield Exploration

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