Confirmed Pay Status is a post-close service offered by Paladin Land Group to get your revenue stream flowing directly to you as early as possible after acquiring producing assets. This process ensures that you are in pay for the proper decimal amount and for all of the production from first sales after the effective date of the conveyance.
Some buyers aren't aware that it is solely their obligation to notify operators, purchasers, and marketing affiliates (i.e., payors of production revenues) that a change of ownership has occurred and that revenues should be redirected accordingly, let alone who all of the parties are that would need to be notified. Payors are not obligated to make any ownership changes or changes to revenue distribution unless and until notified by the owner. Some buyers do notify the operator, but fail to notify other payors that share in the revenue stream and associated payment obligations. This almost always results in loss of revenue and sometimes it can be significant. If you're buying working interests, you'll also need to address the payment of joint interest billing (JIB) and lease operating expense (LOE) and make marketing elections to either participate in the operator's downstream marketing program or take your production in kind to sell on your own.
With Confirmed Pay Status, Paladin will contact the operator of the wells and all downstream payors and provide them with everything they need to make the change of ownership in their system; request, audit, and execute division orders via letters in lieu; and provide you with a certificate of pay status from each operator/payor acknowledging that they have received and processed the change of ownership, confirming the pay decimal interest for each well, identifying the production month in which your ownership becomes effective, and stating the approximate date of the check run in which you should start receiving revenues.
The Confirmed Pay Status package includes the following elements:
Purchaser Notification - sent via email, fax, and certified mail to each purchaser Copy of executed Division Order/Letter in Lieu for each purchaser - broken down by well
- If working interest - Copy of declared marketing election (unless otherwise specified, default option is to participate in operator's downstream marketing program)
- If working interest - Copy of declared LOE/JIB directive (unless otherwise specified, default option is to auto net JIB/LOE from production revenues)
Certificate of Pay Status from each payor - broken down by well Confirmed Pay Status is priced at $500 for each purchaser, regardless of the number of wells. This process is designed to be completed within 20 days of the delivery of each purchaser notification, respectively.