How Long Before I See Royalty $$$

I'm wondering if anyone can tell me how long it takes before a right's owner begins seeing some kind of royalties once a well pad is in place?  I was "unitized" back in April on a pad 1/2 mile behind my home.  Since then they've installed an entire drilling pad, put up a tower (about three weeks ago - complete with bright lights and all), and they've been going gang-busters day and night back there.  How long does it take to drill a well?  Is there a website somewhere that I can look at to see progress, or is that wishful thinking?

Thanks

John 

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Permalink Reply by bo boboski on July 29, 2016 at 1:05pm

From what I've seen,and read, it takes at least 6 months, maybe a year from when they start actual drilling, before you'll see any royalties, Only takes a couple weeks per well to drill, another 2/3 weeks to frack and complete. Then they may cap it off, and wait for better prices, or choke it back for the same reason. Some wells are drilled, then not fracked for many months. Some companies find ways to cheat you out of some,or even all your royalties, so don't be counting your chickens anytime soon. Good luck to you & yours.

Permalink Reply by Nancy Mosley on July 29, 2016 at 2:24pm

What state?

Permalink Reply by Jon on July 29, 2016 at 3:10pm
It also depends how long they take to connect the well to the pipeline
Permalink Reply by John Recznik on July 30, 2016 at 12:41am

Oh, yes, the state is Ohio!

And, believe me, no chickens being counted here - not in this economy!

And certainly not when Chesapeake is involved :(

Thanks

John

Permalink Reply by KAS on July 31, 2016 at 1:26am

Not an easy question to answer...  It differs by many factors.  Our Rice well was built straight through but later wells were started and left idle for a few months.  The ODNR site will give you dates as when things started and will show you the date when production is started.  We got our first check about 3 months after production started - which was about a year after work started on the well pad.  I have heard of some companies not paying out for a year after production starts.  Just a hard question to answer. 

Permalink Reply by David Allen Lilly on July 31, 2016 at 2:06am

Chesapeake came here over two years ago and drilled one short lateral on the pad across the road from my home.

They permitted a unit including some of my acreage two years ago. The first well was turned on May 18th of this year, a well in the unit we are a part of.

This is the last day of July, 2016 and I have not received a royalty check as yet. Further, I don't expect one until some time around Christmas.

I have had a couple of conversations with Chesapeake Energy and they have shared the scheduling information with me very easily, you should be able to call your producer and do the same.

My lease states that they have 180 days from the first day of the first month following the turning on of the production to have me my first check, that is for just the first well. Additional wells in the same unit are only 120 days, which seems silly but is what it is if I read my lease correctly.

I wouldn't start spending my money just yet if I were you. You are in a better place than I am because I believe prices will be much better when you finally go into production than they are currently.

Please keep us posted, all information if accurate, is helpful.

Permalink Reply by John Recznik on July 31, 2016 at 4:37am

KAS - Thanks for replying.  The ODNR site?   Any chance you have a link to where I can get the information you mentioned?  

DAVID - Thanks to you too, for replying.  My lease is also with Chesapeake.  I guess I'll have to take it out and dust it off to see when it says they would need to start forking over what's owed.  I had no idea I could call Chesapeake and get an idea regarding scheduling - I certainly will do that.

In the last few days they've taken down the rig and moved  about 10 trailers off the site.  My neighbor said he talked with someone involved and they said he was told our well is done and plumbed in (whatever that means) and just waiting to be fracked and it will be online.

Permalink Reply by David Allen Lilly on August 1, 2016 at 12:46am

Can you tell us where your property is located ?

Permalink Reply by Bob on July 31, 2016 at 5:39am

This may take a long time. You must know what is behind the Royalty $$$. The Operator pays landowners royalties based upon decimal interest calculations. The Operator must calculate your decimal interest for the unit. Then, they multiply the decimal interest by the current market value of nat gas to get your royalty payment. This could take a long time. They have to calculate a decimal interest for each landowner in the unit. Nowadays, the operator is hiring high school educated analysts to calculate your royalty payments. Call your local landman and demand an audit of the decimal interest. This will protect your rights. You could be losing hundreds if not thousands of dollars each month by an incorrect decimal interest. 

Permalink Reply by KAS on July 31, 2016 at 1:00pm

Try this John

https://gis.ohiodnr.gov/MapViewer/?config=oilgaswells

As you blow it up and move it around it brings minute detail down to property lines.  It is a wonderful site. You can click on any well and it opens open another page with all sorts of links.  Play around with it and you'll get the hang of it.  Shows you who is all in the unit,;Date they started the pad; completed; went into production.  

Permalink Reply by frank speaker on July 31, 2016 at 2:22pm

The good news is that high school students are better at math than when they get older. The bad news is after they calculate the revenue, they are highly skilled at subtracting imaginary expenses.

From my experience, drilling began early in June, the first production came in September, and the first four months of royalties were paid at the end of February. At the end of August, I'll be paid for June production, ( I hope).

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 31, 2016 at 4:40pm

Frank,

       My thoughts exactly, I was going to ask John if he was wondering when a royalty would be paid, or a fair royalty would be paid.

I have the answer if he is interested in being paid a fair royalty - NEVER.

Along with all of the other theft I've found there is now a huge under reporting of Oil, not the 20% under reporting between landowners and the ODNR Volumes, this is HUGE.

Those 10 oil tanker pickups at Paige Well 5H started out at 35 barrels and dropped on down to 10 or less barrels in one month. The Tanker Trucks aren't allowed to make a pick up unless there is at least 200 barrels to be picked up. That means those measly reported volumes were actually greater than 200 barrels each.

Roughly 2000 barrels were picked up and the royalty statement reported more like 130 barrels. The exact numbers are available but it really doesn't matter since they are all bogus volumes being reported.

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