Question about Royalty payments. John Q has 20 acres in a well unit with 3 producing wells. His lease is with Acme oil Co. 20% gross. The wells were drilled by Roadrunner Energy. The unit is 400 acres ,mostly leased by Roadrunner,but John Q 's 20 acres was included. Does John get his royalty checks from Acme,or RR ? If from Acme, Do they get paid from RR ,then forward it to John ? Do they do this free,or do they get paid extra from RR ? I'm sure this happens ,since every producer probably don't have 100% of their unit acreage under lease. I just don't know how it works,and no one I've asked knows either.
evidently,those who know the answer,havent visited here yet today. lol.
As usual with OG, there is no one answer. It depends on different factors. We leased with Gulfport but are in a well drilled by Rice. Originally Rice was sending out the payments, but this changed and we get checks from both Rice and Gulfport. This may be different because of their agreement to share acreage- They are coowners of our well with Rice owning around 61% and Gulfport 39%.
Ok. So evidently, the two companies involved must have their own agreement between themselves. and even tho you only get the % you leased for, they may split it up according to their agreement.
Thx for responses. Looks like there is no cut&dried answer. Could get checks from either,or from both it seems.
Complicated initial question to be sure.
I am leased with CHK. They executed a JV with GPOR to include ~100 of my acres into a ~600 acre GPOR drilling unit. GPOR drilled three wells and has dependably sent monthly royalty payments ever since based on the CHK lease. There have been a few issues with lease terms that GPOR promptly remedied to my satisfaction.
Considering the problems I've read about on GMS concerning CHK royalty payments, I thank my lucky stars every day that my checks come from GPOR.
I bet GPOR is also sending a % to CHK on your 100 acres. CHK signed you and gave you a signing bonus. I'm sure they would be wanting something in return.
Glad to read you're having no issues.