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Permalink Reply by Frank Walker on August 29, 2012 at 4:17pm

Terms of audit (allowed frequency, location, etc.) and procedures therefor need to be in your lease.  If no such thing exists in your lease, you'd better hope another landowner in your unit has such provisions in his.  Failing even that, I want to extend to you a heartfelt "good luck".

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Permalink Reply by Jim Litwinowicz on August 29, 2012 at 4:39pm

Rick; a good lease allows for an annual audit by the landowner when requested. There are companies that will do those audits for the landowner. Don't know what their fees are.

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Permalink Reply by Rick on August 30, 2012 at 12:29am

Well Jim, I dont think that many of the leases signed in the 1990's and now held by production have an audit clause in them. I dont know of anyone that has requested an audit for one of the many many vertical wells drilled in th last century. I will study my lease again, but I dont remember seeing that in there.

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Permalink Reply by Jim Litwinowicz on August 30, 2012 at 1:22am

Rick; I said a good lease.  Precious few leases from the 1990's are good leases.

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Permalink Reply by AJ on August 30, 2012 at 1:40am

I believe that if you look into it, I am not 110% positive how it works, the production company does not determine how much has been removed from a well. A third party measuring company and the purchasing company tells the production company what the final numbers were. These procedures are in place to protect from the very problems you are envisioning.

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