Holding by production

I have a well, now plugged and abounded, drilled by Harper Oil in the 60s but operated at the time by Oklahoma Energy Acquisitions. This is Smith # 1 at 23-18N-5W. Chisholm was permitted to drill 2 horizontal wells passing to each side of Smith 1 but just before the permitting Smith 1 was plugged by Oklahoma Energy Acquisitions

I had been receiving a modest monthly check for over 50 years from that well (originally spaced on 80 acres) that of course stopped after the abandonment. I must assume that there was a trade between the OK Energy Acquisitions (who subsequently went bankrupt) and Chisholm giving Energy Acq. some participation in the 2 permitted wells.

Since the wells we’re not drilled, that participation value is now mute; however, what is the status of the “holding by production” on the 80 NMA that was the basis of the initial Smith #1? Meanwhile, Smith 1 is no longer in production so do I have “rights” in that 80 NMA?

Chisholm has pooled the section 23 and has a well in production so my 100 acres out of the 640A is held by that production. However, the chain of production seems to have been broken so should I be pursuing additional value because off my loss of revenue caused by some kind of agreement that plugged my well in return for allowing 2 horizontals to go forward? Should I pursue some kind of legal review?

Archie- I can review further but the question is not about cessation of production but cessation of operations. Without further investigation I’ll bet operations on the new wells began before the original Smith well “ceased”. Your 80 acres should be a part of the new multi section horizontal wells.

There was never any new production on the 2 replacement wells. The permits have now expired and there does not seem to be any interest in new “cow hunt” wells. The only real effect is that I no longer have revenue from the plugged well, smith #1 — nor royalties from any new production. Too bad - but there is probably nothing that I can do about it!

Mr. Smith:

You should be getting paid on the VADDER 18-05-23 operated by Chisholm. My quick review shows this to be a 640 acre well covering all of Section 23. Is your correct contact information filed with the Kingfisher County Clerk’s office? This well began production in 2016 and is why your interest is HBP, but you should be getting paid on this well. Let me know if you have other questions.

1 Like

I have been paid on the Vadder well from the first sale. My issue stems from the lost revenue from Smith #1 as a consequence of the permitting of the now defunct Cow Hunt wells which were to be drilled by Chisholm. Had Chisholm drilled the 2 horizontals I am sure the revenue would have exceeded that from Smith #1; however, the Cow Hunt wells were not drilled, and the permits have expired. So, I am just out the revenue I used to get from OK Energy Acquisitions with nothing in return?

The Smith sold 2 loads of oil, 146.64 barrels in all of 2016 and 125.44 barrels in 2018. No oil in 2017. There was very little associated gas either so there was no revenue get from the Smith #1 as it was plugged in 2018 as it was no longer productive. That had nothing to do with Chisholm not drilling the Cow Hunt wells. I would presume those wells weren’t drilled because Chisholm nor anyone else believed it was economic to do so. There may be other companies interested in the future. The reason you are getting paid on the Vadder wells is because of the minerals you still own in the section.

This topic was automatically closed after 90 days. New replies are no longer allowed.