Hi Virginia - We own 40 acres and a relative owns another 40, so 80 total which is small in comparison to 640. What you say is correct about the unitization and I think they are waiting it out on the existing lease which ends shortly. Also correct that they can go around you so might want to get in than be left out of the bonus. They are offering $300 lease (two years) and 3/16. No drilling date yet and waiting it out on the current unitization.
I’m still confessed. Is your 80 acres part of the unitization? If so, the unitization will probably sell your lease to a company for the bonus and they will drill. I have never seem a water flood/unitization give back an existing lease just because it ran out, it doesn’t expire till the water flood is dry, then they will release it not before.
I would think you could probably get $350 in todays market if anything is drilled around you. Remember, just because you lease doesn’t mean you will get a well anytime soon. I have lease one farm at least 6 times before they drilled. The bonus money was O K with me and still is. The wells make a real mess out of your land and the H wells take about 5 A in Oklahoma. In TX, they can drill them on 2 1/2 A in town, but the drilling companies only see lots of land in the country in OK, so they just use what they want. I have them measure the acres they need and in my damage contact, I put any addition acres is paid at a much higher rate. So, they do keep the truck and cars on the 5 Acres.
Hi Virginia, Yes we are confused too. We are part of the water flooding and the last payment was Aug. 2010. We think it is void two years after the last payment. We are not sure when they will start drilling. We are in the Osage project. Also not sure if they will want to do the H drilling on our land or not and well be sure to put specifications into any potential contract. We did have two wells, one on each 40 acre back in the 1980s and of course the Mississipian layer is in another formation supposedly under us. I think Osage is waiting out the water flooding lease. The current holder does not have the cash to drill supposedly. We have been getting a lot of calls from Osage and trying to get up to speed. We will be careful and be sure to get a good oil and gas attorney. We don’t live there now so trying to educate ourselves. This forum is very helpful and we appreciate it very much. Any advice is appreciated. Thank you.
K E
Thank you for the permit site at OCC, but my latest well isn’t recorded at OCC yet. It came in the first part of Feb and they are keeping it very quite. Also, if you don’t have a good Oil & Gas lawyer in Oklahoma, I have names of several. My lawyer isn’t taking new clients right now, but I have names of several others who are.
Robert,
You are right about companies not taking care of their tanks, etc.
I had an operator that didn’t check his salt water pipes and it has taken me 5 years of treating the soil to get my meadow back in shape. Of course, he is out of buisness. On another farm that I purchases a few years ago, they drilled a dry hole and closed the pit to soon. Salt water went over some of the land, so I had to call OERB and they worked on it over 5 years. It still isn’t all covered with grass. So, it’s important to have good clauses in your lease. Even with good clauses, like gross production they can get around it by using foreign countries investors.
Also, on a lease that you are marking things out, be sure they can’t read it any more, don’t let them red line it. The foreigner’s will still use anything that is red lined and our government will let them.
One of the things I did was demand that any leases on my land employed the SP001 standard instead of the B.S. API standard that all land production facilities use. Most people dont know that the oil companies are exempt from the clean water act, and can let their dikes, and tanks rot and spill and leak. As a former government oil and gas inspector, I would recommend that you demand in your lease that they use the SP001 standard, which requires a certified oil and gas inspector verify the integrity of all piping and tanks on a regular basis on the oil lease. Also any existing lease facility should have a SPCC plan, (a spill prevention, control and countermeasure plan). If you have a substandard facility, you can demand to see the SPCC plan. If they dont have one, they are in violation of 40CFR 112. I write SPCC plans by the way, and am a certified SP001 inspector. if any of your operators don’t have SPCC plans, have them give me a call and I will make sure they are in compliance with the EPA, recommend they clean up their act, and write a SPCC plan for them.
The other thing I did was make sure there was a gross production clause instead of a net production clause, which does not allow them to deduct the cost of production from your share of the royalties.
Virginia, thank you for the mention about attorneys. I will let you know. I have a great law firm we use here and one of the attorneys is from Oklahoma and graduated from law school there and may help me find someone. If not, I will check with you. I appreciate the offer. You are right that it is important to have a very good gas/oil attorney.
Hi Virginia - I will double check all contracts, easement was for 2 years directly on my property and that ended before the waterflood, August 2010 was the last check for the pool. I will read through everything closely. I believe Osage is looking through all the public notices because they obviously have a lot to gain. Sounds like you have a nice option of living in several places at one time! Thank you for your comments. I know everyone is reading through all their contracts and in touch with their attorneys. Wolf is producing 4 times the others right now although we know that settles down after the first month. No telling the life of an H well compared to a vertical well. We are near Wolf and in the Osage project. http://newsok.com/osage-exploration-pleased-with-results-from-first…
P.S. Virginia - No, we have not received a shut in check within the first year after they stopped producing the flood. We will check all the contracts. Thank you.
Robert
With all due respect to your former employment.Ive been a oil and gas operator for many years and nowhere is it allowed to let your production facilaty leak any fluid .SPCC plans are required in Oklahoma.The lease has nothing to due with that ,the OCC and EPA enforce it.
Lee
With all due respect to Oklahoma oil and gas operators that do it right, there are plenty that do not. EPA is a lapdog to the oil and gas industry. However, they must investigate every formal complaint. If as a land owner you have an operator that has spilled either oil or produced water, and has not cleaned up their mess, call the EPA and file a complaint. A nice 10000 dollar fine might change their mind. Half the state is a future super fund cleanup sight. I have seen oil spills all over the state and forced many operators to clean up their leaking tanks piping and forced them to build dikes. Many had SPCC plans on paper. You can put any stipulations into a lease on your land. My lease has it in black and white that the facility will be maintained and inspected according to the SP001 standard which forces the operator to get his tanks inspected by a certified inspector, which means UT determination of the wall thickness if the tank is over 10 years old. It also means that it will meet NFPA fire codes, the piping will be pressure tested or be above ground for constant monitoring, and compliance will be determined by a certified inspector instead of just the operator. If the inspector finds a facility out of compliance he gives the operator a notice of not sufficient for continued service. The BP spill and the despicable condition of half the facilities in Oklahoma is testament that self monitoring by oil producers is a joke. Half the producers in Oklahoma care nothing about the environment, much less the drinking water of the landowners. You are right that operators are not supposed to let their facilities leak, but they do. A lot of them. I have seen many operators with leaking tanks, no dike, spilling directly into a creek with a current SPCC plan. lf the land owner is aware of the law, and what is required, more operators would actually follow regulation. The SP001 standard is a standard based on engineering standards, not the good ol boy BS that is currently enforced by EPA. I predict that soon, the oil producers will be be no longer exempt from the clean water act. It couldnt come too soon as far as I’m concerned. If it is in your lease that your facilities will be maintained under the SP001 standard, and it is not, then the operator is in violation of the lease.
Hi Virginia - I might take you up on that offer to share a few names of good oil/gas attorneys in OK and/or Logan County for me to check out if that is not too much trouble. Thank you very much.
Robert,
Thanks for the posting/truth. After living years ago in Electra, Texas I’ve seen a lot of the violations you are talking about and I’m sure they are continuing today all over the state of Texas. Robert, sounds like some people can’t face the truth. If it wasn’t for folks like you the United States would be one big cesspool
Again thanks for posting how it is.
Clint Liles
Robert
Again,it is the job of the OCC and EPA which you said you worked for to inforce the rules governing these issues not the mineral owner.Many times the surface owner will not have mineral rights.He must call the OCC for help.And what ive stated is the truth!These violations have been allowed to happen because no one would go out and inforce the rules.
I hate to say this, but if oil companies would take care of the land and mineral owners better, they wouldn’t have to have so many rules. I have been on both sides of the fence. Some of the rules make it almost impossible for the company companies to drill any more.
Yet as a mineral & surface owner, I have seen used pipes being laid for salt water only to have them leak in 7 years. I have found that larger companies do take better care of the property and produce the well better. Small companies just don’t have the backing, but will produce smaller wells. Trying to get OCC to anything is a real pain. I worked over 6 years with them trying to one well cleaned up and producing properly. Finally had to take the oil company to court to get anything done. I’ve had better luck getting OERB to do things then OCC. It’s like OCC gets a lot of goodies from the oil company and can look the other way and we can add EPA to that also.
One more thing people need to think about when leasing their land. Is the company big enough with backing (money) to drill these H Wells or are they only going to be able to drill a V well at about 1/3 the cost and hope some big company will come buy them out.
PS. Love what Chesapeake board did to McClendon’s, to bad they didn’t get rid of him completely. He will take that company down before it’s over.
K E,
Email at (EDITED: Use the private messaging system to share contact info) and I will share a couple good names with you. Presently my attorney isn’t taking new clients. He may after July, but I have a couple other good attorney’s in OK City that we have used in the past.
Robert
Most companies will not allow what your decribing about testing shell thicknes of tanks ect.being put in a lease.Your ideas of such things are a radical recomendation and ive never seen it in a lease or even heard of it.Most oil companies of today strive to have sanitary production facilaties ect. If you have any concerns cal the OCC and they will look into it.
LEE
Lee, It is not radical at all. All refineries, gas stations, farms, that hold over 10000 gallons of fuel, or oil have to abide by this standard. Only onshore oil producers are exempt, and are allowed the inspection language of a “qualified” person to examine their tanks to determine the integrity. If you can answer me how you can look at the paint job on a tank and tell if it is suffering from internal corrosion, I will be impressed. This is the BS standard based on good ol boy BS that API and the EPA agreed upon thru powerful lobbying efforts to let the oil companies be exempt from the clean water act. Not to mention all the other violations such as allowing the vents from their tanks to be combined to a 2" vent for three oil tanks, no maintenance on their thief hatches, (emergency vents), external corrosion, substandard dikes, bird nests in the vents, venting huge quantities of gas into the atmosphere without a permit, trees growing inside the dikes, no signs on the gate of who the operator is, no phone number in case there is a spill, buried piping that is leaking, etc. That is why Oklahoma and Texas are the next superfund cleanup sites. Explain to me why you deserve to be exempt from the clean water act, and I as a farmer am not. The operator has a choice. If he wants to lease the property, then he has to abide by my rules. It is my minerals, my property. Take it or leave it. It is in the lease. Devon took it.
It may be to late to save Chesapeake as theyve drilled for the last four years counting on 4.50 nat gas and now getting 2.25.A lot of their gas was hedged but those positions are running out.The losses each month have to be enormously large.
Update on Devons Adkisson 6.5 miles west of Mulhall. They have completed the frac (13 stages). Looks like coil tubing on well now. They should start initial flowing of well soon. This is a missisippi lime well. Salt water disposal also drilled. Well facilities are state of the art, lined pit, top quality piping, and built above and beyond anything I have seen with any other company, as far as quality of piping, design, and environmental issues. Devon is leading the way in environmental and safety operations. I am very impressed with Devon so far. As far as the good stewardship issue, land owners can also address excess venting of gas and address the higher standards of maintenance and inspection of their oil facilities when they negotiate the surface damages for their well pads. Again I would insist on the SP001 standard for maintenance and inspection of tank batteries. One should be concerned about the gas venting as many sites do not have a sales line for the gas. So the operators vent the gas from the top of their tanks. If your house happens to be downwind this could have a serious health impact on you and your children. I have seen many tank facilities venting off huge quantities of gas from their tanks. Land owners need to be aware of this, and address it in their leases, and contact the Corporation Commission and find out the rules for gas venting. As mineral owners you should demand they sell YOUR gas instead of venting it.
Devon has always been a good company to work with.
Cheaspeake isn’t nice at all.
I haven’t had any dealing with Osage, so can’t say,.
Continental is making nice well site and so far, great company to work with.
Limestone is doing a great job getting their leases drilled, to new of a company for me to rate.
Sandridge Energy and Red Fork Energy is doing O. K. Again new companies for me to work with.
Devon is backing lots of other companies at the present time.
I wish we had a site that would let us rate the company. This would help newer mineral owners a lot.
I have several small companies that I wouldn’t deal with again.