I’ll wait until I get a finding from OCC. I will be meeting with them today.
Kunal,
You can google this and it will give you the rules.
OK statute 52-570.10
You will need to find out what day the first oil or gas was sold. Usually OCC can tell you that and then the purchasing company will usually send a division order about 2 to 3 weeks before the 6 months, you need to check it real close to make sure they have the right acres and decimal. Sign it and send it back. Then you will get your check. If your title isn’t clear, they can take longer, but they may still have to pay you 6%, a lot depends on what is wrong on that. If the company is just too busy to get you a division order and a check, then you can ask for 12%, usually you will have to write a letter requesting it.
Martha McMorries,
You may find this interesting. These are the companies that operate the storage tanks in Cushing. I find it hard to believe we have this much oil in one place. Hope the bad guys don’t decide to blow it up.
OPERATORS OF CRUDE OIL STORAGE TANKS AT CUSHING BY CAPACITY
Storage operator Capacity bbls Planned bbls
Enbridge Energy Partners LP (EEP.N) 19,500,000 1,000,000
Plains All American (PAA.N) 19,000,000 1,000,000
Magellan Midstream Partners (MMP.N) 12,000,000
Rose Rock Midstream LP* (RRMS.N) 7,000,000 600,000
Bluenight Energy Partners LP (BKEP.O) 6,600,000
Gavilon 4,100,000
Enterprise Energy Partners LP (EEP.N) 3,100,000
JP Energy 3,000,000
Deeprock 1,750,000
TransMontaigne 1,000,000
CVR Energy 1,000,000
Phillips 66 800,000
Sunoco Logistics Partners LP (SXL.N) 400,000
Occidental (OXY.N) 300,000
TransCanada Corp (TRP.TO) 2,250,000
Total 79,550,000 4,850,000
The tank farm at the Ponca City refinery is pretty much dedicated to that refinery, I think. The ConocoPhillips, aka Phillips Refinery, as of a few months ago processes almost 200,000 barrels of crude per day. I notice that the output of the Osage/Slawson wells in Logan 17N3W is being sold to Phillips per the Tax Commission Gross Production System. Per discussion of pricing recently, I wonder how this proximity from well to refinery might impact pricing. Especially with the new pipeline crossing Township 17N3W diagonally from SE to NW. Does anyone remember the integrated oil company days? Upstream, midstream, downstream all the same company? I can imagine the anxiety of royalty owners regarding metering, etc. back in those times. I found a check from Conoco to my mother circa 1975 or so for ten cents. Last item in the file until I leased again last year. That was over in 17N4W.
Virginia,
Thank you so much for prompt reply. This info will help a lot.
The only OCC regulation I can find about oil allocation and co-mingling is the following: If there is a regulation that specifies that operators must accurately meter or allocate oil before it is commingled, please let me know. This regulation applies to a dual completion well, but I am sure that Devon will say that it does not apply to separate wells on the same production pad.
165:10-3-37. Control of multiply completed wells
(a) Every multiply completed well shall be equipped, operated, produced, and maintained so that there will be no commingling of the production from separate common sources of supply in the well, except as hereinafter provided. The production from each common source of supply shall be separately accounted for or separately stored and measured on the lease. The production shall be measured by either:
(1) A positive displacement dump-type device;
(2) A continuous-flow measuring device; or
(3) A measuring device of any other type authorized by the Commission.
(b) Each application for the approval of production through a multiple choke assembly in a well shall be filed with the Technical Services Department on Form 1023. The multiple choke assembly must be so designed and located in the wellbore as to prevent commingling within the common sources of supply, but to permit commingling in the tubing string through individual choke orifices. The commingled production shall be measured at the surface and allocated to each common source of supply.
Martha, are there not also significant tanks in Ponca City and some other places? I wonder about the Kansas side. All we get is really bits of information every now and then. The last news I paid attention to is that a major player had opted out of Kansas and sold their interests. Could this be a major mistake for them down the road? I would think so.
Robert,
Off the top of my head, I can’t think of any rules that apply to metering individual wells. But these meters are expensive. According to this article about Alaska, they state it costs $750,000 per meter, yet the oil companies will pay that to keep from paying taxes. Read near the bottom of this article.
http://www.adn.com/2013/08/22/3038229/new-oil-tax-rules-drawing-complaints.html
Harley,
Lots of the oil in Logan, Noble, and Garfield Counties are being trucked to Phillips 66/Conoco in Ponca City. They have it running wide open, but it’s still a smaller refinery than the ones on the Texas and Louisiana coast. I think the ones in Port Arthur, Baytown, and Baton Rouge, Louisiana, all run about 500,000 to 600,000 BOD. I’m not sure what the refinery in Ardmore (Valero) or Tulsa are doing nowadays, but they are small, used to be about 125,000 or so. There is another refinery for CNG north of Garber; can’t think of the name of the town but it’s before the Kansas line. Lots of the refineries got too old to be used and the oil companies need to be building new ones. Guess we will now send our oil overseas and have them refine it and send it back. I think the largest refinery is in India; does over a million BOD.
Virginia, if I was Devon I would not transport oil across state lines.
Yes Virginia, when I wear my paralegal hat I have to love the loopholes! What a mess!
Robert, now I know why OCC allowed Devon to drill a well/lateral in Section 20-19N-01W classified as a Single Zone Woodford when clearly the Location Acceptance sets forth:
First Special Finding: The lateral will be cemented such to protect correlative rights of the offset units.
Second Special Finding: Common sources of supply are very thin in this area. It is likely fractures will penetrate deeper common sources of supply, so they should remain as part of this order listed as Mississippian, Woodford, Sylvan.
However, like I stated, the OCC is allowing this well to be a Single Zone Woodford, but the Woodford and Sylvan Zones are being co-mingled in the well bore and possibly the Mississippian. It’s easy to tell this is happening because of the production amounts.
Now, you are finding that OCC 165:19-3-37 only applies to dual completion wells. I’m saying the well in Section 20 should be classified as a dual completion well, but the OCC is allowing Devon to claim it is a Single Zone Woodford. I talked with OCC Attorney Jim Hamilton who basically said it doesn’t matter what I think, because the OCC enforces the First Special Finding: “The lateral will be cemented such to protect correlative rights of the offset units.” Is this a legal loophole that is so good it can be twisted and bent to fit numerous wells on the same production pad to allow Devon or any other operator to sidestep 165:10-3-37 and 1023???
Martha Mc M.
Devon doesn’t transport oil and they know why. It all goes in a line to Cushing, etc. I had oil stolen for a year. I got these little balls that you mark the oil with hoping it would go across the line. Didn’t do that, but it did get in a pipeline going across state line several months later. The well was shut down after that.
Many of the new wells that have been drilled in Logan County are now showing up on Google Satellite map—interesting.
Met with OCC field inspector and walked over the design of the well on my property. I will await his findings before I comment on the issues again. However, one thing that happened was ironic. I had told the flowback hands yesterday morning that I was going to meet OCC out there that day. I don’t like to blindside people, so I let them know. During the same conversation they told me that they had three more weeks of work there. By that afternoon, they were gone, there was a gate on the site that said “no trespassing.” Hmmmm I wonder what Devon had to hide by getting rid of the flowback hands. This is the company that wants to get along with the landowners and mineral owners. Things are already going south.
I would like clarification on the issue of access. If anyone can point to the rule or to case law that would allow me access to the pad, to look, not touch anything, I would appreciate it.
Martha Mc.M,
Gives a little history of OK laws and years.
http://www.hpj.com/archives/2008/may08/may19/Toughertrespassinglawpraise.cfm
Virginia, I have filed oil theft with the OSBI and had an agent come out to the wells. The operator decided to make restitution before charges, but the OSBI told me to file the report anyway, because the reports go on record and the more reports against a company means the better chance the OSBI investigates.
This Scroggins case is probably a great example of what it is all coming to. Court of Common Pleas is a very low court, and Scroggins will undoubtedly take it all the way to the Supreme Court of the United States, backed by many environmentalist orgs and others concerned including actual landowners everywhere. Even not reaching the Supreme Court, this law will be overwhelmingly overturned because it is too broad and too restrictive. Hide and watch. The only reason actual landowners have not been able to get onto their own land, I do not care what the lease reads, is because they just roll over and play dead on the issue. I am certainly not a hip pocket attorney, but I keep current on what the higher courts do and why. Many people do not like, even hate, the decisions of our Supreme Court, but in reality, they are very bright and knowledgeable, and fair judges, and are on their seats because they are the very best. Robber barons and oil producers try their very best to intimidate land and mineral owners every way they can, it is not yet illegal to say something is illegal when they know it is really not. No lease can change law, none.
Robert, some of us over in Payne believe disposal water will be reinjected for water flooding. GE and Unidro have new cartridge filters that simply filter out oil etc. in the reinjection process which is illustrated in this Unidro link: http://www.unidro.net/index.php/tecnologie/water-treatment/water-injection
“When the stream to be injected is produced water recovered from oil or gas production the treatment must combine the removal of suspended solids with the reduction of the oil still contaminating the water stream.”
In addition, tube skimmers can be used if the disposed water is being stored in tanks before reuse in fracing and simple tube skimmers can be used to collect the oil then filtered and mixed with fresh water for the brackish frac Devon perfected in Canada. All filtered and/or skimmed oil will be sold, but the mineral owner will never be paid for any of this oil, so it is critically important for OCC to require operators to have first in line oil/gas/water separators and meters correctly sized, calibrated, placed and used for optimal hydrocarbon first capture and tanks designated to each well.
http://www.oilskim.com/why-the-tube
I’m still working on trespass laws and will place some calls, then post findings.
Robert,
Did you put in your lease that you have the right to entry or access your property at any time? That you would be provided a key to any locked gates, etc.? These are things that should be put in leases. Once we sign those leases without at least 2 pages of clauses that the oil company don’t like, then we are crying over spilled milk. You may be the surface and mineral owner, but the oil company thinks they own your land once these wells go down. I wish you the best of luck.
Catherine,
Could you give the legal for one of the wells that you see on Google Satellite and the date the pad was put down if you know.
I may not be looking in the right place.