Does anyone out there know anything about what is going on with this well? Spangler 1 in 18 16n 13w I'm pretty sure that Highmark pooled this area over a year ago but that they were working to try to release that well's hold on the area before they could drill.
My wife and I hold acreage in this area that we are looking to sell and were asked about the status of this well, to which we have no answer. Any info on the legal status or even where to go to look up the history (specifically production and revenues) it would be greatly appreciated.
The well is still "active", but the OK Tax site lists the last production as April 2017. So almost a year with no production. You can ask your original lessee for a release of lease as soon as April is finished. The Operator is Spess Oil Co . They may have the lease now. their phone was 918-358-3521 according to the Operator Change Form on file. Friend me and I can give you the production history. The tax site is several months behind, so there might have been another sale that is not yet posted.
Highmark did have a horizontal well approved in late 2016.
That being said, are you and your wife aware of what you might be giving away by selling? Is the offering price competitive or from a cold call or letter? If the company wishing to buy did not know the status of that well, that is a red flag. There is horizontal drilling all around you. Are you willing to give up the royalties from a future horizontal well and possibly more than one well? Do you know the tax consequences of selling? Do you know the activity in your area and the potential to come. All answers to get before you sell.
1st Please forgive my ignorance, but if they have a well in this section and was producing should you be getting royalties from the production past… have acreage there and was pooled with Highmark as of 2016. I’m totally confused and so out of my depth here any information would be appreciated…
Thank you.
Phyllis, you are generally correct, however, it may depend upon the original lease and if it has a depth clause. If you have a depth clause, you may be able to get shallow production royalties from an old lease and new bonus and royalty from a deeper lease at a later date. If you have a very old lease, then it most likely does not have a depth clause on it. If they drill a new well, then it will be held by the old lease.
What may happen is that the leasing title opinion is not as rigorous as the division order title opinion. Some companies will be a bit sloppy on the pooling or leasing on the front end just to get most everything leased since the amount of money is small. After the well is drilled, then they come back with a different title attorney and do a rigorous title search before they pay out the big money in royalties.
My brothers, my cousin, and I also have leases in 18 16N 13W and have been trying to find out what’s going on and have found it difficult to get info. We leased w/Highmark as well. My brother called Spess but was given the run around (“We’re just a small family owned company and my brother does all that stuff. I’ll have him call you back”). Of course we haven’t heard anything. Heard anything since Phyllis’ post?
I looked on Drilling Info and they have last production for the Spangler in Nov 2017, but they are usually a few months behind. Looks like they only pick up the oil every couple of months. This is a really old well. Highmark doesn’t look active in there any more. They never finished their pooling order back in 2016.
I see the lease for Phyllis from 2016.
I looked on Drilling Info and they have last production for the Spangler in Nov 2017, but they are usually a few months behind. Looks like they only pick up the oil every couple of months. This is a really old well. Highmark doesn’t look active in there any more. They never finished their pooling order back in 2016.
My brothers, my cousin, and I also have leases in 18 16N 13W and have been trying to find out what’s going on and have found it difficult to get info. We leased w/Highmark as well. My brother called Spess but was given the run around (“We’re just a small family owned company and my brother does all …
So if Highmark didn’t finished the pooling order, what does that mean
That we are in a lease for another year with nothing being done , or is the lease null and void because they dropped the ball
I’m so confused.
My understanding is that a lease if held by ANY production, like until the well is shut down/plugged. On a legal site I found the following: “According to the law firm Holland & Hart, the held by production clause in a lease can also be called the habendum clause. A habendum clause in an oil and gas lease typically contains two separate terms, the primary term and the secondary term. The primary term is a fixed time period and expires at some point in the future. The time period under the secondary term is indefinite. So long as oil and gas are produced, the lease remains in effect.”
John is correct. If you are getting revenue from the original wells, you are held by those wells as they are in the secondary term of the old lease. They are supposed to be in “economic” pay which can be open to interpretation. I am a bit surprised that they thought they could lease Phyllis if she was already held by production (or an uninformed landman). The caveat to that is that if the old lease had a depth clause. Then a deeper horizon could have been leased.
The thing is the only lease have is the one for Highmark. Knew nothing about the Spangler until it mentioned here. Apparently o need to dig into this and find a trustworthy land man to dig for me
Thanks for the information
My brothers and I have been holding minerals in S18-T16n-13w for about 20 years. In 2016 we leased to Highmark at 1/5 royalty. We are taken to understand now from United Oil and Gas, who are interested in purchasing our minerals, that the underlying 1/8 royalty lease with Spess prevails.
We only recently have learned about the Spangler Well operated by Spess. We have never received any notice of production let alone any royalty checks. My question is, since we have not been receiving any royalty revenue are we still held to the original underlying lease for 1/8 royalty? And is it true that if Spess has not been reporting any production for several months, we can force them to relinquish that lease?
There are a number of questions, first are you interested in selling? Then, when was the well completed, they don’t have to pay you royalties (in OK) until 6 months after first sale. If they don’t start paying within 6 months they will have to start paying interest on the royalties. Are you saying there are 2 leases on the same property (Highmark & Spess) or that Highmark is the lease holder and Spess the operator? Have you contacted Highmark and/or Spess for information, have you received a Division Order? I think you need considerably more information to sort this all out. Find out when the well was drilled and completed for a start. There could be a number of reasons you haven’t received royalties, like it’s been less than 6 months, the company doesn’t have your contact info in which case there would be a hold on the roualties, and others probably. I think your first move is to get as much info as you can on the well and contact the leaseholder about production to find out what’s happening.
I have not been able to get any information from Spess. They have given me the run-around and then failed to return my calls. I assume they are holders of the lease, but not sure. I believe they are the operators. I am sure they have been operating the Sparling well for longer than 6 months. I believe that well was drilled in the 60’s.
I have contacted Highmark but have received no reply as yet. I am not sure how to find out the answers to your questions without knowing more about Spess and why Highmark has allowed their lease to lapse. It was a three-year lease beginning May 6, 2016. A 640 acre Drilling and Spacing Unit was applied for on October 3, 2016, and the paperwork included Spess Oil Company was listed as one of the Respondents. But I don’t know if that means they own minerals in the tract of if they hold a lease.
I learned from a post by M. Barnes that Spess has not reported any production since November 7, which leads me to believe they are currently not producing. I’ve been trying to find production information but so far have not found the correct path to that information.
If I understand this, you have owned the mineral interests for 20 years, you signed a lease with Highmark and you have never received any royalties or information about wells being drilled, no Division Orders, or other notices, and you’re sure the well has been producing during at least part of that time, right? If that is the case you may need a landman and/or a lawyer to sort this out.
Thanks John. Fortunately I have several friends in Oklahoma who are landmen. To answer your question, “first are you interested in selling”, the answer is yes, for a fair price. I will see what my friends think. I have received a notice of Division Order from Highmark, but ho notice of drilling on this piece. We have another piece in S4-17N-12W that Highmark also leased and have drilled. We are currently receiving royalty from them on this piece. I have written to Highmark asking why they have not finished their 2016 Pooling Order. No response yet.
Good luck, I hope that things work out. Yes, getting a landman in the area is probably best BUT beware, I’ve had some very bad experiences with landmen so be sure you get someone that you know personally or with excellent credentials. I don’t know anyone I can recommend as the two I’ve dealt with just wasted a lot of my time without any positive results or even reliable information. M Barnes may have suggested that you check production records for the Spangler 1 well on the OCC website. You can also search that section on the OCC site to for other records like drilling permits and completion reports. It makes things more difficult when you don’t live in the area.
Unfortunately, I have worked with John in the past and can attest to the fact that John knows oh tell well the frustration of working with awful landmen…like he said someone know personally or who comes recommended work best.
Larry, sent you a private message, they are easy to overlook on this new layout so I thought I would let you know.
