Linda, Forgot to give you the site explaining how to calculate RBOB crack spreads.
Market for both WTI and Brent has slumped by about 4 $s in the last few days but Brent not quite that much. We should remember that the separation between Brent and WTI was far, far greater not too many years ago, but WTI has closed the gap tremendously.
I look for it to overtake Brent in the next few months. Many reasons for this I think. It is not too great a deal predicting what the situation with WTI will be at the first of the year, since that is only a matter of 7-8 weeks away.
But I disagree that it will last much longer into 2014, I look for both to skyrocket, but for WTI to be more than Brent for the very first time in History. Exciting and wonderful times for Logan county mineral owners.
Historically oil has been a leading indicator of US inflation, but Government tapering has created a unique situation where rising oil and US inflation diverge and as a result oil is becoming a international commodity. The World’s countries, not just the US, are concerned that run away oil prices will create run away inflation and a world wide recession. Therefore, US tapering of bond buying will begin around April of 2014 and will probably continue at a very calculated rate of taper all the way through 2014 and to March of 2015 which will keep oil prices from quickly dropping or rising until some of the struggling World countries can stabilize and avoid recession. Of course, short term disruptions in oil supply caused by middle eastern wars or conflicts will effect the price of oil, but world leaders will quickly address these hostilities.
I, and a lot of other well informed people, fail to see how any of the Western World leaders can address much of anything next year because they are all in dire straights themselves. It is a 50-50 bet at best that the Suez Canal will be either closed because of military calamity or just seized by Islamic interests who will have a strangle hold on it for a long time to come. If and when that happens market prices will soar overnight.
Does anyone know if any oil wells are pumping on 29 19N 2W Logan County, Oklahoma? Or know of any activity on this location? Opal
Hi Rick, thank you for the information. Do you know why Devon delay in completion report could be? My family are mineral owners. What kind of notice should we have received from Devon since they started a well there earlier this year? Seems to me they should let us know what is going on. Opal
Linda, Oil prices typically drop between Oct. and Dec. due to crack spread for RBOB, so don’t worry. http://www.eia.gov/forecasts/steo/uncertainty/
Ronald Von Wilson, http://online.wsj.com/news/articles/SB10001424052702303661404579179…
Ronald Von Wilson, China, Europe, and the US will not take kindly to terrorists closing the Suez Canal. China and the United Arab Shipping Co. have ordered giant ships from the South Korean shipbuilder Daewoo. These ships will have to use the Suez Canal or go around the S cape of Africa.
It is hard to speculate. They really are not obligated to tell you anything. They are only obligated to pay you within 6 months of the first day of production. They are required to notify the OCC within 30 days of production. Most of the Devon wells in that township have been completed in 3-4 months from spud. This one seems to be overdue. It could be a paperwork issue, problems with the well, or who knows…
You might call Devon owner relations and see if they can give you some info. If you reach a dead end there (likely), then you can try the agent they listed on the spacing order. Brent Kimble 405-507-2249
Other than that you can keep checking the OCC for a completion report.
API is 3508324037 OCC site http://occpermit.com/wellbrowse/
Ronald Von Wilson, Romania’s missile system will be deployed in 2015 which is not 5 yrs. http://finance.yahoo.com/news/lockheed-martin-u-navy-missile-175000…
Oil Industry May Invoke Trade Law to Challenge (Oil) Export Ban http://www.bloomberg.com/news/2013-11-06/oil-industry-may-invoke-tr…
Mr. Van Wilson,
What new legislation? I’m not aware of any new legislation requiring “cotastrophical amounts” unless you are calling 12% (or 6% with non-marketable title) a “cotastrophical amounts”. However this penalty has been in place for some time and only requires the penalties to be paid to the mineral owner. Unless the state is a mineral owner, there are no provisions for them to receive a penalty within any legislation action that I see.
Oklahoma §52-570.10 covers it. Here are the key parts but you can pull the entire Title 52 here http://www.oklegislature.gov/osstatuestitle.html
B. 1. Proceeds from the sale of oil or gas production from an oil or gas well shall be paid to persons legally entitled thereto:
a. commencing not later than six (6) months after the date of first sale, and
b. thereafter not later than the last day of the second succeeding month after the end of the month within which such production is sold.
D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.
2. a. Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.
**Please post a link or documentation about this new legislation. I guess I have missed something. **
Ok, I am in agreement, Rick, cotastrophic should be catastropic I guess, spelled wrong? Not sure. Anyway, 12% per anum figured annually, is pretty darned bad news for the producing companies who would have to pay it to all mineral owners if the had no right to appeal? Very well could amount to millions of buckaroos$ the producers would have to pay, is that not pretty catastrophic? I would certainly think so if I were paying it. Please–that is Mister Von Wilson aka Veebdosa the Doylestown Poet.
Lets see, Rick, the new legislation does indeed say within 6 months of first production they must pay, which, in the case of 20-17-3, Ruffed Grouse, that would be December, or they face cotastrophical amounts of penalties in interest to both the State and the Mineral Rights owners. — Uless, unless, they are unable to pin the blame on any certain entity who may or may not be responsible, and unless that party does not protest and keep it tied up in courts for years and years, etc… It is indeed a whole new ball game, or is it just more smoke and mirrors? ha ha ha.
Martha? How anyone in the International Shipping Lanes legislators approve supertankers to traverse the Horn of Africa on a regular basis is a calamity in the making, and would undoubtedly be sooner vs later. Even the most veteran of sailors of my own ship around the Horn 4 times, were made seasick at some point. This is why the canal is so vital, and it is doubtful the world would do much of anything if Islamists closed or seized the canal except protest it at the UN for years and years.
What WSJ ( sometimes unreliable) says is yet 5 years away, and even that is just political guesswork-this is today. And it will definitely affect Logan County production, no question in my mind.
I wasn’t really concerned about the spelling. I was more concerned about inaccurate statements that people might take for fact. Or the possibility that I was totally oblivious to legislation that could impact me or others still exists.
a) What about the “new” part? That legislation was put in place 20 years ago. Basically §52-570 replaced §52-540 effective July, 1 1993. Do you have info on something newer addressing it?
b) “Millions of buckaroos” Are buckaroos in some way equivalent to the US dollars so I can make the math work?
Documentation on a good well in the Stephens county shows the first payment to the mineral owners was based on $8.2M in gross sales. Using an average 3/16 royalty interest they owed the mineral owners $1,537,500. 12% of the above is ~$184K. Since it was 7 months late 7% might be a more appropriate figure, ~$107K. And I didn’t take any deductions into consideration that would drop it even lower. Not really that much when you consider the initial investment in the well (according to the AFE) was north of $8M. Additionally the purpose of the legislation was to “encourage” the companies to pay the mineral owners in a timely manner. 20 years later the problem still exists to some extent. I don’t have data sufficient to say what improvements it has had.
Rick I thought tere was legislation out of OC just either late last year or mid this year that was suppoled to change all of the penalties? I will try and find what I read about 3 months ago to verify it. Can someone else help in this vitally important matter? One well either way, not too important for producers, but how about a hundred wells they went a year or longer?
Hi Rick: Thanks again for the information and contacts you have shared with me to find out what is going on in 29 19N 2W Logan County, Oklahoma. Hopefully I can find out what is going there. Opal