I am a newbie to this & was very happy to find this forum a few months ago. Started receiving royalty checks on a new well by Longfellow Energy. Of course I was very excited when they contacted me in December 2012 to sign a division order so I could start receiving checks. So much to my surprise it was seemingly doing quite well at first, the second check showed oil volume at 11,221 barrels. Then January at 6,710 barrels, now February at 3,931. I also had joined Oklahoma Mineral Registry Owner. There website reports info on new wells, and they reported on March 6, 2013 that the well that I have mineral interest in is producing 533 barrels of oil a day. So much to my way way disappointment that couldn't be any further from the truth. I know, I know don't count on the royalty check, I've read tons on that very issue on this site. Longfellow really didn't give me an explanation as to why. I fully understand that a well could fluctuate some so I contacted the OMRO site, and a landman did respond to me stating that the amount reported could always be a little more or less. Anybody know what is going on here? Here is the API#3504724610, I managed to get that info out of Longfellow. If I lived in Oklahoma I'd probably try to visit the site, but I live in California.
Thanks for any help on this.
Sandra McQuade
Can find nothing on it yet. Nothing posted.
This is typical for a Mississippi Well. Often the decline curves are sharp. Nothing out of the ordinary or to be upset about. That is a great well! Be proud! Congrats!
Thanks for responding, how did you find out its a Mississippi well and what does it mean by it is typical. This is a whole new adventure for me. Never had anything like this happen. So I've been self-educating myself on the internet for the past 3-4 months. I've read lots on the decline curve, but I thought that it generally takes more than 3 months??? And my gripe is why would someone from OMRO tell me that it would be producing more or less what they reported. February's volume equates to about 140 barrels, just wondering about the discrepancies here. And yes I'm very happy to hear that you commented on how it is a great well. My interest part is not a big decimal amount but I'm happy to be getting some income. Also what is your thoughts on how long this well might produce? Would it be safe to say that it will decline a little more in the next year and then still produce for a few more years?
Mineral Steve said:
This is typical for a Mississippi Well. Often the decline curves are sharp. Nothing out of the ordinary or to be upset about. That is a great well! Be proud! Congrats!
Congrats on the well. It makes me happy to see someone who, like me, is a newbie, doing so well. If possible, where is your property on 20N 05W? Just curious as I'm in 20N 04W.
The 1002A or "Completion Report" will tell you all of that. Its the same thing you saw the 533BOPD on. It will list the producing formation and total depth drilled.
Yes I am aware of that, I've already did that completion report thing. But everyone keeps missing the fact of the matter that it is NOT doing that kind of production. It never has, maybe one day. The Oklahoma Registry Mineral Owner tells you all that stuff as well. If you read all my discussion notes you'll have a better understanding on my questions and why someone can't give me an answer to the fraudulent reporting and how I can get the real amount it has done in January 2013 and February 2013.
Mineral Steve said:
The 1002A or "Completion Report" will tell you all of that. Its the same thing you saw the 533BOPD on. It will list the producing formation and total depth drilled.
Im not sure how you would know that from California... The completion report is a "snapshot" of what the well was doing when they did the completion test. No one (the operator or the mineral owners) would benefit from false numbers. When they say the numbers could be a little more or a little less that is true. But it does not mean that someone is trying to be "fraudulent" Most readings need a little science behind them. For example temperatures the day they read the tank levels. A difference in 21 degrees can mean the tanks read 1% more or less in volume. in a hundred barrel tank that can mean an extra barrel or minus an actual barrel. Most tanks now days are at least 400 barrels and there are usually 6-8 of them on site. So you could see how the numbers would not be a precise reading but are really close.
I'm in section 9. What section is your well?
chad elliott said:
Congrats on the well. It makes me happy to see someone who, like me, is a newbie, doing so well. If possible, where is your property on 20N 05W? Just curious as I'm in 20N 04W.
What do you mean by how would I know that from California? I don't mean to come off rude or anything like that but somehow my point in this is not getting across.
The math speaks for itself on my very first post. Longfellow Energy also told me that they DO NOT report the amount to the OMRO or anybody else. The science needed here is basic math. Just because one day of the test it came in or read at 533 boed doesn't mean that's what it is producing. That is the point I am trying to make here, therefore it should not be reported as such, because that amount is just not true.
I really do appreciate you trying to help me understand this. But my checks say what they are on the volume, and that amount my friend is far from the actual truth. On another note, I was informed that February had some really really bad weather and that power was lost at the rig site. So February's volume as you read on my first post was low at 3,931barrels which would equate to approx. 140 barrels a day. Not knowing how many days they were down, I get that. Also I have read tons on certain aspects of wells, like how open the choke is and stuff like that, that part is the science end I guess. And that is all well and good, don't need to fully understand that. But the math doesn't lie and someone is making that well that I'm part look like its doing more much more than it really is. Sorry I've written way too much.
Mineral Steve said:
Im not sure how you would know that from California... The completion report is a "snapshot" of what the well was doing when they did the completion test. No one (the operator or the mineral owners) would benefit from false numbers. When they say the numbers could be a little more or a little less that is true. But it does not mean that someone is trying to be "fraudulent" Most readings need a little science behind them. For example temperatures the day they read the tank levels. A difference in 21 degrees can mean the tanks read 1% more or less in volume. in a hundred barrel tank that can mean an extra barrel or minus an actual barrel. Most tanks now days are at least 400 barrels and there are usually 6-8 of them on site. So you could see how the numbers would not be a precise reading but are really close.
Okay, I think I understand now what you are getting at. It has to do with the decline. You are saying 533BOPD shouldnt equal 11,221 for a month (30 days) of production. Thats true. But, the decline will start the same day the well reaches its highest output. If the completion report was done when that was close to the highest, you would not have many more days of the well producing like that. My personal experience and for future revenue planning reasons I assume the well will decline 30% a month from the previous months production for first 6 months. On a long term outlook, I plan on the well doing 10% of what it did in the very beginning, after 3 years of being online. Hope that helps!
Oh my, thank the Lord I think we finally hit a connection. So like I was saying all along that it was not doing that production amount, I guess if you live in Oklahoma you automatically know what that reporting number represents in its first few days on a well. Anyhow I guess I got my answer, kinda of a bummer. That's a huge decline right out the gate. So now can you tell me if its the same story on the gas? 352 a day is what is reported as well. Does the natural gas decline at the same level?
Thanks again Mineral Steve for all your help and knowledge on this.
Mineral Steve said:
Okay, I think I understand now what you are getting at. It has to do with the decline. You are saying 533BOPD shouldnt equal 11,221 for a month (30 days) of production. Thats true. But, the decline will start the same day the well reaches its highest output. If the completion report was done when that was close to the highest, you would not have many more days of the well producing like that. My personal experience and for future revenue planning reasons I assume the well will decline 30% a month from the previous months production for first 6 months. On a long term outlook, I plan on the well doing 10% of what it did in the very beginning, after 3 years of being online. Hope that helps!
Sandra, I looked at this for a few minutes. Up until the Longfellow Division Order were you receiving small checks once a year from Tide Mark Exploration, or TLS Oil & Gas?
How did you know that? Yes I get something once in a while. So this Longfellow thing was a surprise....
I started getting checks from Compass Drilling way back in 1992 after my Dad's probate. I knew nothing of all this until then. My Dad died in late 1989, he was taken from me way too soon. I wish he had told me of our mineral inheritance from my great uncle. But that was a different time then I guess, my stepmother was the executor of the will.
I am older now and trying to figure this out. Since being contacted last year by people wanting to buy my mineral rights I became aware of what might be going on.
Mineral Steve said:
Sandra, I looked at this for a few minutes. Up until the Longfellow Division Order were you receiving small checks once a year from Tide Mark Exploration, or TLS Oil & Gas?
Hi sandra.....No well yet, still in the preliminary stages (spacing, ect....). We're on the same horiz. line as you in section 13.
PS: Wish I could help more with your problem, but from what I've been learning, production can and will vary (sometimes wildly) with H-Wells. I'm so far from an expert, its embarrassing, but I do feel you are right to question the variances as oil companies aren't known for being forthcoming and honest (*cough cough Chesapeake *cough).
Again, congrats on your well, and I hope it continues to be productive, even if it is erratic.
This experience is a learning curve as well as a decline curve :)
Keep in mind, your interest is part of a larger "Unit" or pool. There will be several wells in any given unit eventually drilled, perhaps up to 8. Once production declines a lot, they will drill more wells. Further, if there are old vertical wells from the 1970s and 1980s, once the production curve hits those depleted zones, the decline will change. Also, keep in mind that you probably has gas and oil. Priced differently, sold differently, delivered differently. So you may get a check for $2,000, next month $200, next month $200, and then one for $1500, basically though over time, the amount decreases. What is happening is gas is being produced rather uniformly, but the oil tanks are hauled off periodically. It might be a month between tankers of oil sold but each tanker will send a check accordingly. But the gas goes into the pipeline at a regular rate and thus changes little month to month but does decline over time.
The initial flush of gas declines rapidly and your first check is generally for 90 days or more whereas you get a monthly check thereafter. Note the curve below is on a logarithmic scale so the decline is extremely steep in the first weeks. This is the free gas and oil being flushed from the frac'ced zone. The gas thereafter is the gas being deabsorbed off these opened fractures. It is called a power law decline, far steeper than a typical vertical well of days gone by which were exponential in nature.
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Wow I didn't expect anybody to reply to this since its been over a year. But I do thank you for telling me that there would be a good chance that more wells would be drilled. Mineral Steve pretty much cleared things up for me as you probably read on the replies. That well is now producing at about 35-40 barrels a day going by my monthly checks. What a far cry from the completion report though. Its funny that you mentioned the old vertical wells, ironically I have interest in 2 old ones, the St. Clair#1 & St. Clair#2. Jhatco took them over late last year and I've started receiving some small checks.
This experience is a learning curve as well as a decline curve :)
Keep in mind, your interest is part of a larger "Unit" or pool. There will be several wells in any given unit eventually drilled, perhaps up to 8. Once production declines a lot, they will drill more wells. Further, if there are old vertical wells from the 1970s and 1980s, once the production curve hits those depleted zones, the decline will change. Also, keep in mind that you probably has gas and oil. Priced differently, sold differently, delivered differently. So you may get a check for $2,000, next month $200, next month $200, and then one for $1500, basically though over time, the amount decreases. What is happening is gas is being produced rather uniformly, but the oil tanks are hauled off periodically. It might be a month between tankers of oil sold but each tanker will send a check accordingly. But the gas goes into the pipeline at a regular rate and thus changes little month to month but does decline over time.
The initial flush of gas declines rapidly and your first check is generally for 90 days or more whereas you get a monthly check thereafter. Note the curve below is on a logarithmic scale so the decline is extremely steep in the first weeks. This is the free gas and oil being flushed from the frac'ced zone. The gas thereafter is the gas being deabsorbed off these opened fractures. It is called a power law decline, far steeper than a typical vertical well of days gone by which were exponential in nature.
