Lease Records
The responsibility of the Lease Records Department is to maintain and control land records. The Lease Records Department is responsible for payment of bonuses, damage settlements, delay rentals, and minimum royalty payments. We also maintain legal descriptions, remarks, special obligations, well references, tracts and leasehold ownership information. This information is tracked to provide reporting and analysis functions required by land and lease owners. Should you have any questions regarding your lease, please contact the Lease Records Department.

Division Orders
Soon after a well begins producing oil or gas, each owner of an interest in the well will normally receive a division order. An exception may be a subsequent well or wells in a unit or integrated section. A division order is an instrument between the payor of production proceeds and the owner of an interest in a property. The division order will furnish the property name, property number, a description of the property, the owner number, the name and address of the owner, and the decimal interest owned in the property. Southwestern Energy Company’s division order is based on the Model Form Division Order, which was developed by the National Association of Division Order Analysts and was designed to meet the requirements of all the states in which we operate.

Owner Numbers & Property Numbers
Southwestern Energy Company currently has thousands of owners to whom it issues checks each month. In order to manage all the owners in our system, Southwestern assigns to each owner a unique owner number. Southwestern also assigns to each well a unique property number. Your owner number and the associated property number will appear on all correspondence from us, such as a division order or a check detail attached to any payment we make to you for production from the well or wells in which you own an interest. So that we may better assist you, please include your owner number and property number in any correspondence addressed to us.

Payment Calculations
The amount of payments made to an owner is determined by the owner’s decimal interest in the well, the amount or volume of production, and the price paid for the production. The gross amount to be paid to all owners is equal to the volume of production multiplied by the price paid for production. An owner’s individual gross payment is equal to the total gross amount paid to all owners multiplied by the individual owner’s decimal interest in the well. In most cases, the gross amount paid to an owner will be reduced by a state severance tax.

The price for production sold each month may fluctuate due to market conditions. For instance, during 2005 the price paid for natural gas rose dramatically after Hurricane Katrina disrupted production in the Gulf of Mexico. Prices paid for production at that time were some of the highest ever received. Market conditions such as these can increase the amounts paid to owners of interests in natural gas wells. These same conditions have similarly influenced crude oil prices. In a normal scenario, a gas well that had been producing at a fairly consistent monthly rate would have generated much larger checks for owners simply due to the price increases caused by such extreme market conditions. Therefore, please realize that similar events can and will impact the prices paid for production. If production amounts or prices increase or decrease, the amount of your check will be affected accordingly.

Backup Withholding Tax
As a payor of proceeds from production, Southwestern Energy Company is required to report to the Internal Revenue Service all payments made to interest owners. Therefore, the division order discussed above will request your tax identification number for reporting purposes. If you are an individual, your tax identification number is your social security number. If you represent a company, it will be your company’s tax identification number. If we do not receive your tax identification number, we are required to withhold a federal tax referred to as "backup withholding." The backup withholding tax rate is 28%. Click here for a downloadable W-9 form to provide your tax identification number to Southwestern Energy Company.

Ownership Changes
During the life of a well there may be a need to update our ownership records. This may be due to several types of transactions or occurrences, such as a sale of the property or the mineral interests therein or the death of an owner. In order for Southwestern Energy Company to update its records to reflect such changes in ownership, you must furnish the company with the appropriate instrument reflecting the change in ownership that has been recorded in the real property records of the county or parish in which the well is located.

Retroactive Adjustments to Payments
Occasionally we have to make retroactive adjustments on current checks for prior months’ payments. If we have to make such an adjustment, it will impact the amount of your check. While we certainly try to avoid these types of adjustments, many of the causes are outside of our control. We regret if this happens and will provide an explanation of the adjustment upon request.

Summary
Southwestern Energy Company welcomes you to the energy business. If you have questions we will be glad to help you. You may contact us by email at ownerrelations@swn.com, or you may call Customer Relations at 1-866-322-0801.

The information on this site does not constitute legal advice or opinion and is provided solely and exclusively for general informational purposes.