Here’s a link to a large booklet published by the Oklahoma Corporation Commission called “Basic Information for the Oklahoma Royalty Owner”, http://occeweb.com/OG/Basic%20Information%20417.pdf. I strongly recommend it for anyone who owns minerals in Oklahoma. Among other things, it explains the Federal land survey system used in Oklahoma and many other states. Has a lot more helpful information on all kinds of topics of interest to royalty owners.
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Excellent reference! I have used it many times. Keep checking back every year as they update it.
Thank you A_Monty! That document has a lot of information. I have read through it, but still have questions. It may be that the answers are staring me in the face and I don’t know enough yet to make sense of them!
(1) As I understand from other postings: only the section(s) with perforations will receive royalties. For example, well name “MCPHERSON 20-9-11 1H” has a surface location in Caddo 29-9N-11W but all the perforations are in 20-9N-11W. So only the folks in section 20 get royalties, correct?
(2) Is there any compensation for the well surface location (either the surface land owner or the mineral owners)? It seems to me that the surface well is tying up land that could be used for other purposes (either surface or minerals). Who negotiates this?
(3) Kaiser-Frances has filed an “increased density” for 29-09N-11W (Case # 201902847). Is this typically filed in the “perforation” section or the “surface” section?
(4) When I look at the production history for the well in section 20, I see one volume per month for gas, but several volumes per month for oil. Why is that? Is this typical?
(5) I’ve read in other topics that horizontal wells typically have higher production at the beginning, then slows down. What is the typical life-span of a horizontal well?
Thanks for helping me understand!
Excellent questions:
[quote=“pskinner, post:3, topic:51519”] (1) As I understand from other postings: only the section(s) with perforations will receive royalties. For example, well name “MCPHERSON 20-9-11 1H” has a surface location in Caddo 29-9N-11W but all the perforations are in 20-9N-11W. So only the folks in section 20 get royalties, correct? [/quote]. That is correct. If the well is a multi section well, the royalties are paid according to the percentage of perforations in each section.
[quote=“pskinner, post:3, topic:51519”] (2) Is there any compensation for the well surface location (either the surface land owner or the mineral owners)? It seems to me that the surface well is tying up land that could be used for other purposes (either surface or minerals). Who negotiates this? [/quote]. The surface owner negotiates. Better have a really good surface attorney help with this part. It is quite separate from the mineral lease negotiations.
[quote=“pskinner, post:3, topic:51519”] (3) Kaiser-Frances has filed an “increased density” for 29-09N-11W (Case # 201902847). Is this typically filed in the “perforation” section or the “surface” section? [/quote]. Would normally be filed in the section(s) that will have perforations. You can see the details in the exhibits once they are posted. The wells are typically laid out like cigars in a box. I have seen some in a bicycle wheel shape. It depends upon the reservoir and the orientation of the natural fracture system.
[quote=“pskinner, post:3, topic:51519”] (4) When I look at the production history for the well in section 20, I see one volume per month for gas, but several volumes per month for oil. Why is that? Is this typical? [/quote]. It is permissible for owners to take their own oil and sell it if they have their own contracts. Many working interest owners do that.
The life span will vary according to the reservoir, the type of completion, the operator, price of oil and gas, etc. The horizontal wells that I have had evaluated by my engineer have typical lives of 30-60 years. The typical shape of the decline curve has been described as a “hockey stick” laid on its side. The first few years are the blade and the last many decades are the stick. Low production for a very long time.
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Thank you M_Barnes! Great info as always! (fyi, the formatting is a little odd on the quotes, but maybe just my browser)
I noticed that. Usually, it behaves, but the last one was the only one that worked. Anyway, I hope the answers are helpful.
Yes, very helpful! This is starting to make more sense! It was bewildering at first with the terminology and technology learning curve. I’ve read many of your postings (along with other folks who are so helpful). I almost always learn something new. Thank you for your time and patience.
Some good places to get more information: Mineral Help tab at the top of the forum BLOGS Category on the Forum NARO Tab on the Forum (National Association of Royalty Owners) Good little book called “Look before you Lease”. Used to be available on the NARO website. Also was on Amazon last time I looked for it.
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Wow. Lifesaver. I’ve been tying to find info and this is great! Thanks for sharing…