Martha McM is referring to BOED. Barrels of oil equivalent. Be very careful in using that for economics. You can use the numbers for a feel for the size of the well, that is okay.
In the “old days”, oil prices and gas prices were more linked than they are today and were related to the BTU value of the products. ~6000 cubic feet of gas (actually more like 5800, but the math is easier with 6000) = 1 bbl oil in BTU value. If one barrel of oil was $6, then 6000 cubic feet of gas (6mcf) was $6 (or $1/mcf).
Not today. With oil prices at $54 per barrel, and gas prices at ~$3/mcf, Oil prices went up nine times and gas price only three times. you can see the disconnect on the prices. So oil wells are still much more valuable than gas wells. Do not use oil prices for BOED or you will be sadly disappointed.
M Barnes, You are correct. We have had a departure from the SEC Oil and Gas reporting methods. Right now, reserves estimates are invalid due to the severe price collapse. Reserve values and quantities reported on E&P companies’ SEC Form 10-Ks or other reports may not reflect the fair market value we need to determine prices for lease negotiations. Hopefully, once we have price stability in 2017 -18 we should be able to use the 5 year forward prices and convert reserve reports into fair market value amounts which helps mineral owners determine income amounts based on boe/d. You are right that oil is currently more valuable than gas, but we may see a departure from that rule once the US LNG exports increase gas production and upward price movement follows. Here’s a good report that helps understand our current reserve and fair market evaluation situation. http://www.srr.com/assets/pdf/understanding-sec-oil-and-gas-reserve…
The last event on the docket was an order dismissing the prior motion for trial. You can find it at the link below.
http://imaging.occeweb.com/AP/Orders/occ5343202.pdf
Does anyone know current status of the Gastar spacing unit request for Sec35 18N 8W? It’s been going on a while and last news I had was that Rebellion Energy gave approval (after a protest) for the Horizontal spacing unit and so I was expecting to see the spacing order (docket 201506039) approved but have not. Maybe I missed something?
Than you for that information. I will write them a letter and remind them of the 12% interest if not paid in April.
Mr. Barnes,
In your post you mentioned that production was indicated in Jan. 2016 - - I assume you meant 2017? There are two Stangl wells.
Does anybody know what happened to the Stangl well 25-16-9 6 H? Months ago someone from Newfield told me the well started producing Sept. 6, 2016. Newfield should have paid royalties in March but I did not receive any. Did the well stop producing? I can get nothing out of Newfield.
Stangl was sold to Newfield in June of 2016. At that time it was waiting on a completion. Oklahoma tax site has first production as September 6, 2016 and has production in January 2016. They are usually several months behind in posting.
DO’s should have gone out in Feb-March or so. If they don’t pay by April, they owe you 12% interest if your title is clear. Write them a letter requesting a DO, payment and reminding them of the statutory interest. Make sure they have your correct address.
I hope you mean Stangl 25-16-9 6H.
yes, correct. finger slipped. Stangl 26-16-9 6H did have production in January 2017.
I was wondering if anyone knows Newfield’s future plans for Section 25- Township 16 N, Range 9 W? Chesapeake was developing that area with two wells drilled and plans for a third. When Newfield bought it they did not drill the third well.
Can anyone tell me if Newfield used their “Advanced Completion Design” on Stangl 25-16-9 6H? Can one find out what the 24 hour flow rate is on this well?
what is the legal description of newfields big Burgess well???
Just guessing Burgess well is in 18-16N-07W. Newfield states “Burgess 24 hour peak production per 1,000’ gross perforated interval 417 BOPD”.
Our completion report for 9-16n-7w was in October and first date of sale was December. As of yet we still haven’t received any payments. They keep trying to give us the run around by making us send in all the information (clear title, copy of lease, etc) that we’ve already given them. We have sent several copies of pretty much anything and everything they could possibly need and notified them that we will be expecting the 12% interest. Sure would be nice if they would get their act together! Is anyone else having trouble with Newfield?
The Burgess is in 18-15N-7W (not 16N).
Amy, they do not have to pay you until six months after first sales, so don’t expect anything until June. The 12% interest does not kick in until then. With hundreds of owners in each section, it takes a while to get everything straight. I have had trouble with Newfield getting it right. Just keep after them. You should get a division order in late May or early June. Make sure it is right.
I think all the oil companies wait until the last minute to pay, that’s my experience, just good business on their part BUT as M BARNES said, they have SIX MONTHS to pay, if they don’t by then they will have to pay the interest. Difficult to wait but that’s how the oil business works.
Statutory time is six months, so don’t waste money on an attorney before then.
We always had numerous old vertical wells watering out when no one knew a horizontal well could be successfully drilled. I’m sure some horizontals are compromising some vertical wells, but in the long run horizontals do maximize the returns per well which means higher returns for minerals owners and tax increases for the state.