Did the Big Freeze drop volumes and revenue?

[Mikro1TX]

Hello All, Wondering if anyone else saw a reduction in there February Royalties that may have been a reflection from the BIG Freeze? I received mine yesterday and would say about a %50 reduction in volume for Oil on my statement. No word from the operators. Waiting to see what happens next? God Bless and peace to you all. MK

[G_Hundt]

Mikro1TX, our Chesapeake (Burleson County) production for February was 51% of January’s. I assume that was somehow due to the Big Freeze.

[Mikro1TX]

Thanks I suspect many of us will see similar results. Thank you for letting me know you outcome. I have had other issues that have arisen and watching things much closer now. mk

[tracy_lenz]

I wouldn’t be concerned over the drop. Even insulated pipelines have a tendency to freeze in places, and trucked oil would have had a delay in transporting just from the road conditions. Operators also may have shut in the wells for a few days to avoid pumping into frozen lines, unpowered transfer stations, or to give midstream (pipelines and trucking) time to catch up if on-site tank capacity couldn’t hold several days of production. Many sites in the Midland area have electric lines powering pumps and whatnot rather than gas engines, so I’m guessing those areas had “rolling blackouts” like the rest of us (if not worse).

Even in places where operators have invested quite a bit in winterization of the equipment, there’s usually some downtime associated with a major weather event like this. Like with a hurricane, it’s best practice to shut in the wells if there’s any chance of chaos happening at the surface to avoid spills or equipment damage.

Most wells drilled in the last 5 years should recover nicely from a 5-10 day shut in, which is the most I’d imagine the wells actually being down. Any other reduction should just be a delay in selling the production, which should get caught up and you should see it in your March check.

Older wells (5+ years) may need extra help to get back online, however, as older wells don’t have the same energy to get back flowing again.