Royalty amounts

So I know this has been beat to death, and I'm aware of the variables involved, and also the resulting variations in royalties...........BUT......... A person I know who is in a unit currently being drilled was told by someone with the drilling company that he could see $50,000 per MONTH in royalties.  He owns 60 acres.   Is this even possible for a Utica well??   Even if it was a great producer, and the well had several laterals, and it was a small unit, it just doesn't seem likely to me.  They told us when we signed leases that the signing bonus was "chump change" compared to royalties, but that amount just doesn't seem possible.  By that I mean I can't wrap my head around a gas well making so much $$ to where they could afford to pay one landowner that amount.   I asked again if he meant that amount is what HE could see, or what the whole UNIT would see, and he said again he was told this is what he could be getting.   Oh and the kicker?   His property was HBP by an old Atlas well, so he's at the 12.5% rate also!!

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Permalink Reply by Trav on February 6, 2014 at 10:03pm

Wow. I have 50 acres here for the Utica with 2 wells and at 12 1/2 %.  First check was for $3600 for the month. Fifth check was down to $2200...for all 50 acres.  $50,000 per month for that acreage I can only dream about.  

Permalink Reply by Todd on February 6, 2014 at 10:40pm

Thanks for posting Trav -

Where are you located and what is your decimal interest?

What was the first month's production on each of the 2 wells?  Did the operator also take deductions as well?

Todd

Permalink Reply by Don C on February 7, 2014 at 6:26pm

We have a lease that allows an audit of the O/G company records.   I am hoping that the others landowners in the unit will help out on the cost of the audit.  I am sure it will be an expensive ordeal but maybe worth it if there is this much deception. 

 

dc 

Permalink Reply by Tony Yurina on February 8, 2014 at 11:34am

You might try finding a forensic auditor, sometimes they work on contingency of what they discover... 

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