Question about Royalty payments

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.

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Permalink Reply by James T Monyak on April 18, 2016 at 8:39am

Who ever owns the unit will pay the royalties.  There can be more than one owner and the payments are made per percentage owned.  Keep in mind ownership can change at anytime.  Just as one can sell their royalty interest "payments" to someone else, so can the O & G company can sell their interest in the well.

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