Is there a maximum amount of time that a gas company has after completing a well before you get division orders and is there a maximum amount of time they have before they have to begin paying royalties?
There is not really a maximum. It could easily take months or a year or more. Per the Texas Natural Resource Code, there is a 120 day rule, but if the operator has any title issues, it could be delayed.
Here is the Texas Natural Resource Code . I can post more of this section if you are interested:
Sec. 91.402. TIME FOR PAYMENT OF PROCEEDS. (a) The proceeds derived from the sale of oil or gas production from an oil or gas well located in this state must be paid to each payee by payor on or before 120 days after the end of the month of first sale of production from the well. After that time, payments must be made to each payee on a timely basis according to the frequency of payment specified in a lease or other written agreement between payee and payor. If the lease or other agreement does not specify the time for payment, subsequent proceeds must be paid no later than:
(1) 60 days after the end of the calendar month in which subsequent oil production is sold; or
(2) 90 days after the end of the calendar month in which subsequent gas production is sold.
(b) Payments may be withheld without interest beyond the time limits set out in Subsection (a) of this section when there is:
(1) a dispute concerning title that would affect distribution of payments;
(2) a reasonable doubt that the payee:
(A) has sold or authorized the sale of its share of the oil or gas to the purchaser of such production; or
(B) has clear title to the interest in the proceeds of production;
(3) a requirement in a title opinion that places in issue the title, identity, or whereabouts of the payee and that has not been satisfied by the payee after a reasonable request for curative information has been made by the payor.
I have concerns about timely divisions in Louisiana too. Someone told me that even without any "issues" that might slow things down, that it can take 6 or 7 months after they have completed a well and laid a pipeline.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More