Monday, March 26, 2018

Royalties And Stripper Wells -- March 26, 2018


Later, 9:39 p.m. Central time: the third answer provides the tax differential when a well goes to stripper status:
When a well is declared a “stripper” by the ND Oil and Gas Division the state
tax is lowered from 10% to 5%.  At a given volume and price, the net royalty is
5% higher on a stripper well.  
Later, 5:44 p.m. Central Time: the second answer I got:
a) stripper wells have no impact on the royalty payments of mineral owners
b) monthly minimums may have to be met to "cut" a check
Later, 5:43 p.m. Central Time: the first answer I got, from Phil McPherson, a CFO in Newport Beach, CA:
Though each lease varies, I have never seen a clause in the 100's of leases that I reviewed as having something for stripper wells that is different than an "economic" well.
Original Post

I've long forgotten -- if I ever knew -- does anyone know how royalties are affected when a well goes to "stripper" status?

A reader wants to know and I'm hesitant to answer.  E-mail responses are kept confidential; comments can be made anonymously. If you have a great answer and want credit for the answer, let me know. Thank you, on behalf of the reader who is curious.

No comments:

Post a Comment