M Barnes,…lovely you made it so easy for me. You tried to tell me…“less information is better.” True…love…love “getting it.” Just “delicious.” Thank you for t he help. I walked into all this mineral leasing …COLD! knew nothing, and could not proceeded without the help knowledgeable persons like you have so willingly given. Thank you… This Oil business is so exciting. And grateful my late daddy bought these minerals or this oil world would have forever been an 'UNKNOWN QUANTITY. Now M. Barnes I just am likely to come back again and pick your brain. Hope that will be OK. You and Wesley Skinner know so much and have been a huge help to novices like I Leta. Thank you…thank you.
Leta, if you want to catch up a little while you wait, read the MINERAL HELP listed above, go online and read the investor presentations for the major players in the SCOOP and ARKOMA basins to see what they are doing. Newfield, Continental, Marathon, Apache, Devon,
Hughes County is in the Arkoma basin which is mostly a gas play, so not quite as popular right now. Many reservoirs for many years from vertical wells, but now drilling quite a few horizontal wells. Petroquest Energy is in your area, so look them up.
Leta, what dates are you trying to find? For which report? I usually don’t type them in. I just do the location search by S-T-R and then open the actual document to get the important dates. Those scan dates don’t mean much.
Message for M Barnes and Wesley Skinner: My Question: On the use of the http:://imaging.occeweb.com,( below) what does it mean on the space for “effective/approved Date”–asking for two dates; And the scan date, also asking for two dates I don’t have anything but the Spud date… Also I typed in the correct operator # from the Spud Notification and the system told me I had the wrong operator. Please tell me what I am doing wrong or where I can obtain 4 accurate dates. Thank you kindly,…Leta C.
i everyone,…Leta Here. I have a question for M. Barnes and Wesley Skinner. My Question: I know now that PetroQuest hit hydrocarbons. What I can’t find out is (1) DEPTH for those findings. (2) Volume for those hydrocarbons. WHY?..no one will tell me. Since I was told of the findings of hydrocarbons, why in the world keep from me these two items 1 & 2 above? Please enlighten me. My minerals are S21-07N-10E (HUGHES COUNTY). Thank you M. Barnes and W. Skinner for any information you might expound upon…Leta
There have been hydrocarbons on that section for many years. All of that information is public. For the older vertical wells, your acreage must be within the spacing order for that well in order to receive royalties. For example if you had 10 acres in the NW4 of the NW4, but the well was drilled in the SW4 of the SW4, you would not get royalties for oil is spaced at 40 acres, but perhaps for gas since it might be spaced at 640. For horizontal wells, the spacing is 640. You are probably more interested in the new horizontal well.
If you know the well, you can also look up the current production on the OTC (OK Tax Commission) website. It is usually about four months behind, so don’t expect anything yet.
Petroquest pooled back in February, the permit is for the DORA #1-21 with a surface location on a pad in 22. The well was spud January 23, 2015. No completion info is listed yet which is not unusual. It takes about three months to drill, so that gets you about April. Another month to complete (unless they are holding off to complete all four wells from that pad at the same time). You will get a Division Order in about five to six months from the completion date. Your first payments must be six months from the month of first sales or they owe you 12% if your title is clear or 6% is the title needs to be cured (“fixed”) . So don’t expect any news until October or November. They are not trying to hide anything. This is quite normal for the time frame. They have discovered hydrocarbons, but don’t know the flow rate yet if they haven’t completed the wells yet. (None of the four from that pad have listed completions yet.) Somebody at the local coffee shop may hear news that they want to share, but most often company people are forbidden to talk.
The permit says that the depths they are permitted to go for are the:
Mississippian 4300’
Woodford 4700’
Hunton 4830’
Sylvan at 4900’ The total length of the well is supposed to be 10330’.
Thank you M Barnes…as always your information is specific, and substantive. You must have been working this ‘oil industry’ for a long time because of your comprehensive, and knowledgeable feedback you give to multiple persons on this forum. When I finally connected with an employee of my operator --PetroQuest, the other day I was told that information on
DEPTH AND VOLUME PRODUCTION was confidential. WHEW! I was taken aback. That was news to me. You are right, my well is Dora 1-21 according to the “SPUD NOTIFICATION” back in Jan. '15. And I do know it is a horizontal well. Per your recommendation I will follow up with OTC (OK Tax Commission) website. Thank you again M Barnes for your help…Leta
If you have not signed a Division Order yet, you may want to see the replies to Jen’s inquiry in the Discussion Forum above and the comment by M Barnes below.
Jen, two wells were drilled from a pad in 13. One goes all the way through 13 and into 24 a short way. Clara 1-13/24H The other goes through 14 and into 23. You will get paid on the percentage of the well that is in 13, looks to be about two thirds 13, one third 24. The DO will have the exact percent on it. If your royalty interest is correct, then sign it (if it is on a NADOA form and does not change any terms of your lease) and send in a W-9. Wait for your check!
Wesley Skinner, …No Wesley I haven’t seen this until just this moment via your alert. Thank you Wesley. You know that I am a total NOVICE. What I need from your brain…PLEASE…please tell me if this COMPLETION REPORT.IS…".good…bad…indifferent? " Talk to me! Can you tell ‘prima facie’ if the volume of production is good or bad? Wow! Is it premature to be excited about DORA’S (1-21H) production? You and M Barnes have kept me soooo…informed, Please don’t run away…will you take a few more moments and tell me Dora’s potential…THANK YOU… Thank you…Leta from MONTANA
You will need to wait for your first check to know for sure. There are estimate calculators - but “don’t quit your day job” is a good saying to remember! The net acres you own, the number of acres in the unit (640 more or less in this case), your royalty specified in the lease, price of natural gas (variable from month to month), and post-production expenses charged, decreased production after the first few months, and periodic shutdowns for well maintenance will all determine your income.
Leta, this is an average gas well. It has no oil reported, so you may or may not get any Natural Gas Liquids (NGL’s) or condensate with it. It is a gas zone area, so I doubt there would be much.
The choke is wide open 64/64 (essentially an inch) and the pressure is fairly low, so not a barn burner. Any eggs in the basket are better than no eggs in the basket.
Your first check will be the largest one because it will include four to six months of production. Do not be surprised if the next one is much lower since it will only have one month or so of production. Gas sales are usually reported a bit slower than oil for lots of reasons that are perfectly normal. Do not be surprised if you see adjustments made from prior months in later checks. This has to do with metering and how they assign the production to each well. Save all of your check stubs for your taxes. Also check your stubs to make sure that if you were force pooled after May 2012 or your lease has NO deductions that there are NO deductions. You may have some fussing to do! Make sure that the royalty interest on your Division Order matches your net acres/spacing x royalty (3/16ths etc) x % well on your section if it is a multi-unit. Make sure your first check matches the DO! Keep everything!
Speaking of taxes, OK production taxes will be taken out of your checks. If you are out of state, you will have to pay OK state personal taxes, so be ready and let your accountant know. You may also have to pay a pretty hefty federal tax depending upon your bracket. So I tell people to save 50% of those first year of checks out for taxes and accounting fees. It is too much, but then you can throw a little party with the leftover after you pay your taxes and your accountant. The next year will be lower, but that one large check can bump some folks into a new bracket for a while and it can be painful if you don’t plan for it.
M Barnes, wish I could serve you a cup of coffee. Come on to my beloved Bigfork, Montana up here in the NW corner–45 minutes to Glacier Nat. Park. 1.5 hours to the Canadian Border. Should you come this way, I will serve you a quality cup of coffee on my deck overlooking the beautiful Swan River. Now, back to minerals. You have stated, below that my well (Dora 1-21) is average…hmm…on a scale of 1-10…10 being the best, what number would you put to my well compared to the hundreds of producing wells in my home state of OK? Both Gas and Oil? What volume producing well are you impressed with? Average (grateful that not a dry hole), however, mediocrity is never exciting in any resulting effort. Would you take another moment and expound upon my question, because not only will I learn more, but others’ reading your response will find it instructive in their oil education. So please M Barnes, and thank you for your professional goodness to educate so many of us … who are.just groping around in the dark. …Leta from MONTANA (Big Sky Country)
Bertie, 58 leases have been recorded in 9N10E in the last 36 months. Some may no yet be recorded. None are in 3. Do not be the first to lease. In my experience, lease offers tend to go up over the season of leasing in an area. General offers in the area have been at about $100-150/a and 3/16ths, so compare that to your offer. Make sure you get a VERY good lease with depth clause, no warranty of title, commencement of drilling and NO DEDUCTIONS. No enhancement, no nothing. This is a gas area and the deductions will really hurt your royalty.
Leta, that is a tough question… and quite complex-it depends upon so many factors-geology of the reservoir, what basin it is in, feet of perforations, completion techniques, etc. Let me do a little research and I will let the data answer the question given certain parameters.
Leta, glad that helped a bit. You had asked about a scale from 1-10, so that is what binning means. You take the complete range of completion values and divide them into equal sizes and then put the wells in the bin that they land in according to their size.
Don’t worry about the exact date for the DO. It is generally accepted that the operator must pay six months after the month of the first sales. So sometimes it slides into the next month if their paydate is slightly different. Be concerned if you haven’t heard by late December or January, then you can fuss! They will owe you interest.
M Barnes …Wow!..What specificity. But it gives this lay person, I Leta, a depth of understanding of Woodford well VALUES. I was not familiar with the term “Binning.” But obviously common knowledge to you. Even though my DORA is only a ‘Bin 1’ on the scale of 1-10…10 being the best, I am still grateful that I was ‘NOT’ told a Dora was a Dry hole. With your detailed expansion I am learning once again the complexity of your Oil Industry. I have ‘NOT’ received a DO (DIVISION ORDER) or any indicator of any $$$$ forthcoming but understand PetroQuest has until 27 November '15 to pay what Royalties entitled to me or that PetroQuest would be obligated to pay 12% interest past that date. Am I correct?..Thank you …thank you for Expounding on relative values for both Oil & Gas…Leta from MONTANA.
you made it so easy for me. You tried to tell me…“less information is better.” True…love…love “getting it.” Just “delicious.” Thank you for t he help. I walked into all this mineral leasing …COLD! knew nothing, and could not proceeded without the help knowledgeable persons like you have so willingly given. Thank you… This Oil business is so exciting. And grateful my late daddy bought these minerals or this oil world would have forever been an 'UNKNOWN QUANTITY. Now M. Barnes I just am likely to come back again and pick your brain. Hope that will be OK. You and Wesley Skinner know so much and have been a huge help to novices like I Leta. Thank you…thank you.