I just saw that as well. Sounds better! Good luck on the next well.
Harley,
I think you are right. Seeing 125BOPD & 100MCFPD on three different wells seems a little odd. If I was guessing those numbers are all before the ESP systems are in place. Flowing those numbers are impressive. But with a fluid moving system they will increase dramatically. I take the Osage press release as an investor friendly memo. If they came out and said our infrastructure plan is not adequate and we are at the total mercy of the power companies to get it in place, then there stock would more than likely fall a bit. Looking at the play in Logan outside of their area they are competing with Devon in regards to setting up the proper infrastructure. OG&E and other power supplying companies probably tend to favor Devon in regards to wait time due to the fact Devon is probably one of their larger clients.
Devon is building their pad on my place, (18N-3W-sec 4), going to drill three production wells. The one draining my minerals is a Mississippi well. The spacing seems to be 640 for the Miss. wells, what is the spacing for the woodford? Where on the corp. commission website can I find the drilling permit for these wells, with the bottom hole locations etc?
http://imaging.occeweb.com/OG/Well%20Records/1DD16588.pdf
http://imaging.occeweb.com/OG/Well%20Records/1DD16587.pd
Robert here are permits. 640 acres for woodford
Robert,
Enter the section, township and range at this site" to see the permits, (form 1000), well spuds, (form 1001a) and completion reports (form 1002a) for each well.
Robert, By the way, of the two that Ron M posted only one will pay royalties in Section 4, the other while drilled from Section 4 is horizontal under section 9.
Just leaving off of Fort Knox, Kentucky, and a little beyond our national Gold Depositry, straight down Wilson Road that goes allah the way to Elizabethtown, there is this beautiful white sign with a beautiful green Maple tree on it with the word OSAGE under the tree. It is just nearly at the intersection of Wilson Road and Logan Street. Makes me smile.
This isn’t Cathy but—how long do they haul oil from a lease before they make a determination as to how many BOBD that well is making? At the Ruffed Grouse in 20-17-3 they were transporting oil on 8-1-13, this is 8-21-13, that’s 3 wks +, is this going to be another 125 BOPD Miss. that Slawson brings in?
Min Steve, I am not sure about this at the very minute, but Osage was at 96 cents the share just a couple days ago, and while this is over double to its low late last year, it still leaves a lot to be desired doesn’t it?
Not Catherine, I believe they are allowed 60 to 90 days to announce anything, and believe this is from the completion of the well. I am wondering about how the oil was being transported from the well head on Aug 1? To my knowledge there has been no report on this one way or the other, and is probably the Proverbial Hear-say. Believing rumors to me would be akin to believing anything on the new Al Jazeera TV network. The onlyiest thing they might have right is that there is more to the story. But they will not tell it. LOL
Ron Wilson–you must have missed the comment on 8-1-13 by the surface owner of the well in 20-17-3, “hauling oil and flaring gas”. It isn’t hearsay. As I understand it, they have 6 months from the first sale of oil to get division orders completed and money to mineral owners.
Mr. Wilson,
I only invest in things I know about. I do not know about wall street or how Osage has structured themselves as a publicly traded company. That being said I think a big jump on the market for them would come after the announcement of the sale of this field to a major operator with major bucks for a long term drilling plan. Im not saying that would or will happen but that’s what I would look for if I followed their stock.
Mr. Brian,
I see your concern. As a mineral owner who has participated in the area I can assure you that these operators spare NO expense with their gauges and meters. They are very automated and from what I have been told can see exactly what well is flowing what rates into the tank from a computer in their office. This I have been told is a major plus because they don’t have temporary shut ins on the well due to pumpers not emptying the tanks on time.
I have a concern that is already troubling me. Devon is going to drill three wells from the same location. They say they are only going to set six tanks, 4 oil and 2 water. If they have three wells producing into 4 production tanks, that means they will be co-mingling the oil at the tanks, thus the wells will not be allocated by sales. So that means the production will be allocated by meter either at the well head or in a dedicated separator, with meters for oil gas and water. As a practicing instrument tech, depending on the type of meter, the margin for error is huge. Does anyone know how Devon is allocating oil for this type of situation?
Robert Brian–this isn’t Cathy but–if all 3 wells were in the same 640 spacing permit I can’t see where it would make any difference what tank the oil went in to or if it was co-mingled, as long as the mineral owners got their money. I retired in 1995, back then, a tank was gauged, the truck was loaded and the tank was gauged again. The difference in the gauges on that tanks strapping determined how much oil was removed. I don’t know how it is done in this day and age. As for measurement accuracy, if your testing equipment is accurate and you have zeroed and spanned the meter properly, you will get an accurate measurement—from an old re-tired instrument man’
Let me clarify. Only one well per 640 acres. But metering is prone to error. I do this for a living, and find routinely 1 to 3% error on gas and oil meters on a monthly calibration check. So 1% error on a well flowing 200 bbls per day x 30 days would be 60bbls. If the error is in your favor great. But if it is the other way, you are being shorted a significant amount of money. Normally they are allocating well production by sales from the tanks. But if they are allocating by meter, then the potential of major production loss just by having frac sand build up on the orifice plate or in the sensing lines can cause major errors in your allocated oil and gas production. Some meters are more accurate than others. After over 20 years in this business, my faith in accurate meters is proportional to the frequency of the calibrations, and the proving of the meters. Believe me, working for a pipeline company we calibrate our meters on a monthly basis, and usually find errors however small, and are quick to correct them. One other thing might be worth taking notice of: If you have a gross production clause your royalties would be based on the production on the well head period. A net production clause would be based on the production minus transportation costs and shrinkage. Because they are going to allocate from the meter, you would not lose production by the light ends flashing off in the tanks, (good for the net production clause owners), because they are not allocating by the amount going into the trucks, or pipeline minus the shrinkage. They only thing I can think of is that if they residence time in the tanks is so short because they are pumping directly into the pipeline, then that is why they are allocating by meter. Just the same, I would be trying to find out what the calibration schedule is, and how often they are proving their meters. I would also like to know if they are adjusting production rates according to the error they find on a monthly calibration. Can anyone lend insight into this situation?
I see your point and don’t argue it. After the Koch Oil vs BIA cases in the 80s and 90s I would think this is more tightly watched and regulated. Im sure that the companies that purchase the oil and gas from these operators are not going to risk their contracts by shorting the likes of Devon and the mineral owners. From what I understand it is actually measured more times than at the meters and tanks. When it gets to its final destination the small errors are usually calculated and adjusted with back checks due at certain periodic preset times to the operators and then distributed on later to the mineral owners via revenue checks.
It appears to me that a lot of what we read here is based on old technology, and from what I have determined, holding tanks are largely a thing of the past, and this is because of the nature of the Cushing to Port Arthur pipeline that is now in operation. This pipeline is dependent, from what I understand, on North Central Oklahoma to keep things flowing, and measuring is don down the line and in totally new (albeit unproven) ways. This is all new ground, everything is new and un-proven. As for having 6 months to pay anyone, who allows this 6 months? Is there a statuate somewhere I am not able to locate and read? Why would they go to the issue and financial burden of constructing and maintaining things like holding tanks or areas in times like these? It makes no sense. A couple years ago, maybew thought was to hold our clean crude, the cleanest on the planet, for Canadian Crude, the dirtiest on the planet, so the Sask. crude could be “cleaned up,” thus raising the price of it, but our government is not about to allow this anytime soon. In my opinion, it will never happen.
Mr. Von Wilson,
Look for the Production Revenue Standards Act. More specifically around 52 O.S., 570.10(B)(1)(b) & (D)(1)
Ronald Von Wilson, please elaborate on your comment “nature of the Cushing to Port Arthur pipeline that is now in operation. This pipeline is dependent, from what I understand, on North Central Oklahoma to keep things flowing”. Please explain the pipeline structure you are talking about for us novices. I don’t understand what you are talking about.
A certain item of interest to everyone involved would be the NATIONAL OIL AND GAS ROYALTY Conference, this Oct 21-22 in Houston, and well worth my own attendance for reasons other than royalties. I have no doubt that everything anyone ever knew about Oil and Gas royalties will be made crystal clear to everyone before everyone is told that all of that knowledge has nothing to do with our situations, and the typical answer will be “We don’t know yet…”