i am trying to get a better understanding of the difference and meanings of
intents to drill, permits to drill, and completions.
especially in regard to the production process and the reports that go along with them.
thanks
OK, I’m not an authority, but this is my experience. Corrections from more knowledgeable parties will be appreciated.
Typically, oil/gas companies seek permits to drill before they announce intents to drill, intentions being meaningless without a permit. But, before permits can be granted, they need to secure leases or ownership of sufficient portions of a well-spacing for the formation they intend to drill to and produce from. If they cannot get rights to all of the spacing, but have enough, they can be granted an exception for the remainder … given sufficient effort to contact, etc.
Permits to drill are based upon spacings for the various formations. These are set in order to prevent over-drilling, damage to formations, etc., as well as to ensure the mineral rights owners cannot be “robbed” of their minerals by drillers close to the owners’ holdings. All who own rights contained in a spacing share in the production. Permits are granted for specific periods of time, so companies cannot get a permit and just sit on it. They may let a permit lapse if new wells in the area and formation aren’t producing well. They can get an extention/new permit if there are problems get a rig in to do the drilling.
Example: Red Rocks, Cougar #1-28, permit granted May 24, 2019, intent to drill posted June 6, 2019.
Completion reports are submitted to the Oklahoma Corporation Commission some time after all planned work on the well has been completed. A well may produce and have some production sold before all work is completed – such as when a drilled well that has not been fracked is still flowing well enough to be worth it.
Completion reports give volumes of what is coming out of the well as either flowing or pumped. The production will list crude, natural gas, natural gas liquids and/or water. Water is pretty common. Crude is in barrels (bbl), natural gas is in thousands of cubic feet (mmcf). Not sure how natural gas liquids are reported, since none of the wells I worry about produce any. Not sure about water volumes either, because I don’t really care that much.
You can see what volumes are being sold from a well by going to the Oklahoma Tax Commissions. (Search for “Public PUN Search otcportal.tax.ok.gov”.)
Hey Martin. (I graduated from Watonga in 1974). In short, there is no difference between a Permit to Drill and Intent to Drill (Form 1000). Interchangeable vernacular. This is filed AFTER a Spacing Order has been obtained for the desired formations. The preferred formations may have been spaced many, many years ago. Sometimes concurrent with the Intent. An Intent can’t be granted for a specific formation until that formation has been spaced. The caveat, in the absence of spacing, the well can be drilled on a “lease basis”. No need to go into that here. Intents to drill are good for a period of 180 days and can be re-newed.
As per OCC regulations, completion reports are to be filed within 180 days of first production, but variances can be and are granted. The completion report is full of information about the production, pressures, choke size, all taken at any particular point in after the well is completed. Most of the time this is after fracking has occurred, but doesn’t have to be. These numbers should be taken with a grain of salt because the layman doesn’t know all the particulars of when this data is gathered. There is other information on the completion report (Form 1002-A) that will show unit size, surface & bottom hole locations, and other regulatory information as per the OCC. The answer to “spectralguy55” about gas liquids (condensate)- they are measured in gallons.
Hope this helps. “GO EAGLES”.
Todd M. Baker