Anyone have knowledge of how CLR will choose which wells to shut in? Maybe “all of them”?
So far a lot of them. Depends on pressures & water. For my wells, seems those that have been online more than 6 months are being shut in. Especially the Springer wells.
Thanks, Todd. I guess I will have to wait and see. I do have a couple of Springer wells to worry over. With the drop in oil prices a full shut-in won’t make a lot of difference anyhow. Jim
Hopefully mineral owners didn’t “count” on revenue for their livelihoods. I know that there are many folks that are going to be hurting financially because they thought & were told by trusted folks on this forum that the income would last for 30-60 years, that all offers are lowball offers and to never sell.
Todd - Did you happen to participate in any of the 3 Phelps wells (Grady 3107N06W) to know if they’ve been shut in? GD
I am not in the Phelps wells but as new as they are I would bet they are shut in too but don’t know for sure.
Todd: Thankfully we have mostly accumulated the income. Gave a bunch to children and grandchildren. If companies start cutting dividends, that will sting. But we will be okay for three or four years, at least
Thanks Todd, I appreciate the response regardless. Time will tell.
Hey Sylvester - while I suspect Continental will unlikely be considering a strategy calling for shutting in all wells, it’s clear from updates in the company’s May 11 first quarter earnings release and from the tagline “Preserving Value Over Volumes” used in a May investor update presentation, that the company has settled on following a “hunker-down” strategy for the near future. To date CLR has curtailed nearly 70% of its oil production and shrunk 2020’s capital spending budget to less than half of last year’s $2.6 billion budget. CLR also expects to operate only 4 rigs at the end of this year - split evenly between the Bakken and OK - representing an 80% drop from the 20 rigs operating in January. In addition OK’s year-end rig count represents 1 less rig than currently operating there, however so far there’s been no indication of how the company intends to deploy the 2 remaining rigs.
Btw, JW, thanks for the post.
Thanks Sylvester. Hope it’s helpful.
I kind of figured that they would want to leave the oil in situ until prices rebounded. Maybe preserve minimal production to preserve lease rights. The Oklahoma rule to permit them to shut in at will might be legally weak (taking rights from the lessors without compensation). So minimal production might be the choice. I would be okay with that.
In 35+ years I have never seen an OGL that says the lessee can’t shut in a well. Someone may have seen one but I haven’t. Most leases provide for lessor compensation for shutting in wells for periods longer than a year. Many variations of that clause. Bottom line is if CLR shuts wells in for more than a year due to current circumstances, our leases and minerals are basically worthless because the economy is at zero. I don’t think anybody wants that. These are definitely trying times and patience is more than a virtue.
Please remember before you throw stones at companies that have spent millions trying to develop your assets, that you can drill wells too, nothing is stopping you.
So, Black Mesa, drilled by Camino, can be shut down while it is still in the six-month period after completion. First production was in January I believe. They would not notify me if it was being shut down? I don’t even have division orders yet.
Mineral owners are not generally notified of operations activity, including shutting in of wells.
One way to tell if the well is shut in is to watch your check stubs if it was producing. (In this case, that would not apply). You can also watch the well on the OTC tax site. It lists production for the last “12 months”. It is usually behind by about two to five months. https://otcportal.tax.ok.gov/gpx/gp_displayPublicPUNListSearchDownload.php I just looked it up and the number are posted through March. Keep an eye on it and see if has been shut in with “zero” numbers. It may just be choked back for a while. They would want to get the frack water out of it.
Martha when I go to the OTC site and put in the PUN number it pulls up the well but when I click on the PUN number for information about the well nothing comes up. Is the information you got through March available to the public?
I checked a couple of wells where I have minerals. Gas production has posted for the month of March but no oil production. Is it possible to have gas production on a shut-in well? Or, maybe a lag in posting the oil production?
Shutting a well in while still unloading completion fluids (at least a month but up to 6+ months) can damage the well’s long-term production (but it depends on the individual well and timeline for how much it could be damaged). I’m sure the operators are balancing that with the current environment in different ways, but it makes it less likely a well with first production in 2020 would be shut in already.
Go the link in red. Type in Black Mesa in the Well Name. Click on the link in blue for the PUN that is underlined. Go to the Production Tab and you will see the production posted so far. You can click the print button and it will bring up all the info on the well production so far and you print it or save it as a pdf.