If anyone can answer it would greatly help… How big of a difference should it be (and maybe why) from our royalty statement oil production compared to the otc production report ? To cause concern and to notify the oil company? For instance OTC oil production showed 26,716.71 My statement showed 7,318.26 This has happened more than a few times … would it be a matter of concern ? Thanks in advance
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That is big enough to call on and ask for an explanation-in my opinion.
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Thank you for the response … dealing with the lady at the oil company is not a pleasant … so wanted to make sure about my concern …
Which company (or call service…) isn’t being pleasant? That’s unfortunate. I agree with Martha though. That’s a larger discrepancy than the typical reasons I can think of would cause.
Thank you … this discrepancy is this big on more than 15 transactions on different wells and months … the lady always puts me off I have found several problems in past with my percentage wrong and one month didn’t send check at all… said oh it’s coming… and it was a a good size check but sent my brothers their check that month … other times they say check was mailed and the check date and the post office stamp don’t coincide with what they told me … I even found discrepancies that benefit them in production volume … and some months they have put 2018 numbers in with 2020 statements … I really do feel they try to confuse us … I worked in a rural gas measurements for several years and I verified everything at end of the month … sent volume statements ran charts did it all… I loved it … although it was natural gas the same type of verifying goes with oil production …
With oil you have to be careful when comparing Production vs Sales. They will almost never be the same. Oil is sold by the truckload so there will always be some oil in the tanks on location that carries over into the next month. Generally speaking, sales may be lower than production one month and higher the next, but over the long run it should all even out.
Thank you this was quite a bit and nothing made up in following months ? Still learning it all …
Sadly, many companies profit by skimming amounts due to an owner. When caught many have had to pay large sums. The records should be examined to determine whether such practices are occurring in your case.
I just emailed them … waiting for a reply … I also have a question about horizontal wells … I already received payments from two different wells … in Oklahoma … 08-12n-08w and 05-12n-08w … they added horizontal wells in both these sections … am I correct in saying we should be getting two payments in addition to original payment on these two wells … or maybe I should say two different percentages ? Not sure if I am exposing correctly but if we own rights in both sections 05 & 08 we should get two addition checks for the two sections? Thanks for your help
I should also state am I correct in saying they should add two addition percentages to each well added ? Original wells were the 08-12n-08w and 05-12n-08w The additional horizontal wells are the following 3mx 4hx 5whx 6whx 7whx So knowing these run through both original wells we should receive check percentage for both original wells ? Or just one ? Again I may not be exposing myself correctly? Pls help me if u can… thank u
Those sections are a bit complicated. You have more wells than you think.
Section 5 has This Guy 5-12N-8W 1WH (1st sales 9/2/18) and This Guy 5-12N-8W 2MH (1st sales 9/2/18). Those wells are 100% in section 5. Operator is listed as Paloma. Shell Trading is picking up the oil and Ancova Energy Marketing is picking up the gas. They would have the same decimal amounts since the spacing, net acres and royalty are all the same, plus both wells are 100% in the section. Your equation would be net acres/actual spacing acres x royalty x 1.0. The actual size of sec 5 is 631.34 acres.
Section 5 also has the northern part of five more wells.
Summer Moon 8-5-12N-8W 3MHX (Active date 6/6/19)
Summer Moon 8-5-12N-8W 4MHX (Active date 6/6/19),
Summer Moon 8-5-12N-8W 5WHX (Active date 6/6/19)
Summer Moon 8-5-12N-8W 6WHX (Active date 6/6/19)
Summer Moon 8-5-12N-8W 7WHX (Active date 6/8/19)
Section 8 has the southern part of each of those wells. They have a surface location in Section 17,
The completion reports are not posted yet and they are way behind on those. You should have gotten a Division Order for them in about Dec or January of 2020. Shell Trading US Company is pickup up the oil and OneOK Field Services is picking up the gas. Your decimal in each of the wells may be slightly different since each one is a different length. For each well, your decimal will a total of the equation for 5 and the equation for 8. The decimal for 5 will be the net acres you have, the 631.34 acres, the royalty you have, and the percentage of perfs in 5. The decimal for 8 will be based upon your net acres, 640 acres, royalty for 8 and the percentages of perfs in 8.
I addition, sec 8 has two more wells-
Summer Moon 8-12N-8W 1H (Active date 6/30/18-1st sales 7/5/18)
Summer Moon 8-12N-8W 2H(Active date 6/30/18-1st sales 7/2/18) These two wells were shut in April 2018-about June 2019 while the others were frac’d. Very common to see that.
These two are completely in section 8, so your equation is net acres/640 acres x royalty x 1.0
You need to really get on this. You may have an interest payment due on Summer Moon 3-7 if they have not paid on them. If they have not paid, send the operator a certified mail return receipt and demand payment and interest. Keep a copy of everything!
The first payment you get on a bunch of horizontal wells like that is the largest one that you will get since it has about five or more months of production included in it so may have some back dates in there. The next ones will drop as they are monthly.
There are a lot of reserves at stake here, so critical that you get correct answers. Do you have all of the OCC cases that go with all the wells? They should have mailed them to you. If not, they are available at the OCC for free.
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This is why it is important…
Paloma may have been waiting for the final splits for each of the longer wells. They were just posted on June 10, 2010. For example, I just pulled one of them and the Summer Moon 5 WHX has 49% in Sec 5 and 51% in Sec 8. Do you know how to look them all up? Then you can do a calculation for yourself and see if matches the DO when it comes. They are late paying (unless they paid you in February), so they still owe interest.
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Wow let me get my thoughts together…and relook at everything … they have paid on the additional wells but they also messed up on the decimal points on check so Paloma reissued and corrected on statements but I need to see if those are correct now as well … Basically Paloma’s statements month to month have been so back and forth it’s a mess … with corrections etc… having to really follow and research all corrections … and like I said while doing that I found the discrepancies in volume on oil production way way above 3%… sos now I even have questions about natural gas and NGL Volumes if the oil is volume is so off? But as I u detest and there is no way to check the natural gas and NGL volume ? Will be working on this today again… thank you so very much for the insight !
I have found it useful to go on the OTC Gross Production site and print out everything on there for production for each well.Gross Production
Type in Summer Moon for them and This Guy for the others. For some strange reason, I am picking up Summer Moon in both 5 and 8 for the long wells. Usually only in one or the other, so make sure they say the same thing.
Then go to the OCC Well Records site to get the well info. Look in sections 5, 8 and 17 since the surface locations are different. I print out and save digitally all of the documents for each well and keep them together. http://imaging.occeweb.com/imaging/OGWellRecords.aspx
Then I go to the OCC Case files and save digitally, all the cases that go with each well and the cases that go with the whole section for Increased Density, Spacing, etc. There are 40 cases for Section 5. About that many for section 8. Some may be the same.
http://www.occeweb.com/caseprocessingonline/default.aspx
Make sure you have the correct net acres and royalty for section 5. The spacing documents say that it is 640, but it is really 631.34 acres.
Make sure you have the correct net acres and royalty for section 8. The spacing is correct at 640.
Make a table in Excel or on paper. You will need to check the final order for the Horizontal multi-unit wells for the splits.
Then you can be ready for the Division Orders! and you can follow the check stubs better. Let me know if you need help.
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I actually have done my spreadsheet On my computer and I do print off the otc … and I have looked occ… I do need to investigate some more on occ … thank you again … will get my info together a bit more I am sure I will have more questions soon… once I do the percentage figuring … also was this guy that emailed me correct in what he said ? I was understanding each well has its own meter … so with him saying runs through one doesn’t make sense to me?
I prefer if each well has its own meter, but sometimes they do them together if they are on the same pad. Are they listed on your stub together or separately?
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