OK Stephen let’s call a truce. Your points are valid. My focus may not be as narrow as you think, I just hate to see an overreaction. Media feeding frenzies tend to make things worse.
You are right, Michael Hutchinson, media feeding frenzies do make things worse as does government intervention (can you say XLPipeline?).
I can’t rely on royalty income, so I am not quitting my day job.
On the economic stimulus of low prices…sure there is some…but we think about that in terms of the old days when conventional wells cost $1 or $2 million or we were importing more of our oil…now with wells costing $10-$12 million a drilling cutback is a LOT of capital investment erased. I read where something like 20% of S&P capital investment is in the oil sector, and a large portion of the good jobs created since the crash have been in that sector. Plus Wall Street is in energy with both hands and feet and hedging positions with derivatives…who knows how all that plays out.
Thanks Stephen.
Do you think this means that they might go after our oil more since it doesn’t go by railroad?
http://seekingalpha.com/article/2754815-bakken-crude-trading-at-41_…
.000146484 of 640ac or .000073242 of 1280. They won’t know exactly what the split is until well survey is done. Right now it’s at 50/50
Linda, there is a well survey and it looks to me like they completely drilled both sections but I’m not real sure I’m reading it right. Should be a 50/50 split but you might want to get another opinion or ask Newfield.
Linda can’t wait to hear the latest. At this point I’m hoping for lots of wet gas coming out of 2N/4W. Some cold weather wouldn’t hurt either! I guess I should be careful what I wish for, heating my home with propane seemed smart 10 years ago.
Linda,
I think this is the OCC order you need.
APPLICANT: NEWFIELD EXPLORATION MIDCONTINENT
INC.
RELIEF SOUGHT: MULTIUNIT HORIZONTAL WELL
FOR THE UNNAMED 1H-20X WELL
LEGAL DESCRIPTION: SECTIONS 20 AND 29,
TOWNSHIP 2 NORTH, RANGE 3 WEST, GARVIN
COUNTY, OKLAHOMA
CAUSE CD NO.
201303460-T
ORDER NO.
623849
SECTION LENGTH OF ALLOCATION OF COSTS
COMPLETION AND
INTERVAL PRODUCTION
Sec. 20, length 4,900’ 49.0696%
Sec. 29, length 5,085’ 50.9304%
TOTAL 9,985’ 100.00%
Well that economic stimulation argument is an interesting one. Most of the good jobs created since the crash have been in the energy sector. And today each well costs $10 -$12 million instead of the $1 or $2 million conventional wells did in the old days…so that is a LOT of capital investment that gets erased when drilling slowdown comes…I saw one report that said 20% of capital investment in the S&P was in energy…so I wonder if the economic stimulus benefit outweighs the deceased employment and capital investment. Plus Wall Street is in the energy sector with both hands and feet with junk debt, and hedging their positions with derivatives…who knows how all that unwinds.
This is quite the conundrum. There are two types of war being waged: one is physical which is the war against ISIS and the bigger target Syria (gas pipeline through Syria to feed Europe and Syria is an ally of Russia’s), the second is financial or economic which turns out to a global war crush an adversary’s economy and gain a superior edge in the energy market (a world war of sorts). We are caught in the middle of this politically influenced mess and it will hurt a bucket load of people invested in the energy market (labor and owners). The biggest problem? Russia…they are feeling the heat and if they don’t back down and things escalate into a proxy war with NATO in Ukraine then we all lose.
Sorry Michael H I just had to unload. I’m usually just an observer but 20 years in the Army gave me the benefit of a global perspective. By the way I have read everything that you have posted on this site, aside from those you have befriended, for the last six months and I know that you are an educated man with a trusted understanding of economics. You are a valued go to guy on this website. Truce indeed Michael…
Hard to believe this boom could downturn so quickly but we’ve seen it so many times before around here. Like I said before we’ve never seen a boom as big as this one and hopefully it is just a short lived downturn and not the bust of olden days.
Changing the subject a bit but I asked hubby to make a quick tour down to the 2n4w diggings to see what is going on so when he returns maybe he’ll have some good news for some of you. Keep a stiff upper lip. It may not be as bad as you think in the future. And don’t forget “we’re just passing through this life” and make sure you are prepared for the afterlife. Where I’m planning to go it’s all boom and no bust and we don’t even have to worry about the traffic tearing up the gold streets! (giggling) 
OK…just heard from my sweetie at the diggings and he talked to a man that said the #2 Poteet well has been fracked and is now on production. Said it’s flowing into the tank battery but he didn’t know how much it was making (or if he did he was playing dumb anyway). Hubby also said the last Poteet rig is still up so don’t know what’s going on there. He didn’t think any of the other Poteet’s had been fracked yet and they were planning on doing that only after the last rig was down but ??? Start counting those 6 month down for that check on #2 anyway!
Father in law just called to say that mom got her papers on the Studdard well in Garvin 2n3w. Can someone tell me what decimal percentage is correct on her 1/2 acre with 3/16 interest? We want to get them in as quickly as possible because Newfield had told hubby’s cousin that they would get a check in Jan. if the papers are returned right away. Wahoo for Mom!!!
That’s exciting, thanks Linda.
I think it does give us an advantage over N.D. being so close to Cushing.
Your sure welcome! Can you tell me what that decimal amount would be on mom’s royalty? Going over now to get the papers to fill out. She’ll be excited too even though it’s only 1/2 acre.
My brother-in-law works for Scientific Drilling. They plot the horizontal drilling maps for most major drilling operations. They are talking about a 30 to 50 percent layoff to offset workload change…
Its only a matter of time, guys. If the price stays below 60 dollars, the cuts will come…inevitably.
If they are paying 50% of the total production of the multi-unit it should be about .00007324.
I think you are right soonerpe…I went over and got the DO papers and Newfield is saying she has .00004493 so now I’m confused as to how much she actually has. They gave her $500. bonus on the forced pooling and I was thinking that the forced pooling amount that she accepted was 3/16 for $1000. an acre. So I was thinking she must have 1/2. If anyone knows any differently on any of these facts I’d appreciate that information. She owns in Section 20 which from this information I see they didn’t get 50% but a little less. Thanks soonerpe!
Linda,
I recommend you ask Newfield how they calculated the interest. I believe you are correct on the pooling terms so if she received $500 they thought she owned 1/2 acres when pooled. If you back calculate the acres from the DO ownership it indicates she owns 0.3125 acres. Sometimes info is found after the pooling which changes the well’s title opinion. Someone with a land background can explain further.