McKenzie County, ND - Oil & Gas Discussion archives


#723

I also share the same frustration with XTO. I have been trying to think through ways to increase our odds of getting paid. Some background thoughts: 1) for any well run American company, an 18% interest penalty would drive compliance to the five month schedule so one has to assume they are getting far more benefit keeping our money for corporate uses despite the 18% cost. I cannot understand it because borrowing rates are far less than 18%. 2)based on some comments xto employees have made I believe they only have one person working on all division orders for North Dakota. Again, they cannot be this incompetent, so I have started to conclude that not paying the mineral rights is a strategy. Denbury ( a much smaller company with fewer resources had no problem paying within 5 months) 3) I believe xto is a separate legal entity within Exxon so Exxon may not be responsible for XTO’s liabilities should there be a catastrophic event. 4) letting these payments build up unpaid for so long is unbelievable poor internal controls but again it appears the company’s auditors are not doing anything that would effect change.5) XTO is not changing due to mineral rights owners complaints. We are too small individually and don’t have any power. 6) XTO refuses to share how far behind they are. I have been told multiple times that they are handling the division orders in chronological order of when the wells start up so based on Dan’s comment they are minimally one year behind. Does anyone have any insight into that? It seems we need some external pressure to force change. I contacted a N.D. Congressman a month ago and I was the first complaint he had ever had. The ND state commission cannot do anything because our agreements (leases)with XTO are private. My best ideas are political pressure(may not be able to get it), an investigative media report or pressure on the Exxon audit committee. The risk of going public with these problems would be backlash of never getting another well drilled! I’m very interested in everyone’s thoughts on what to do.


#724

Is there a way to find out how many barrels each individuel well thats pumping is producing per month thru the NDIC ? They must have to report this. Thx


#725

Dale, the production for each wells is reported separately, monthly. I believe you can find this information for free but I have always had the the $50 a year subscription so I have never looked for the free method. Maybe someone else can point it out.


#726

Mr. Kennedy, If an oil company were to go bankrupt ( no one ever thought Enron would happen) would all the unpaid royalty payments be lost? Are you aware of anything in North Dakota law that calls for royalty payments to be higher in the queue than other creditors?


#727

Thanks Mr. Kennedy… I was trying to find the monthly production for each particular well. Looks like they just give the averages.


#728

Dale, I highly recommend the $50 a year subscription to the NDIC O&G Division. I know money is hard to come by these days but if you want a real understanding of your well, a history of it’s production, sales [which is not the same thing] what went into drilling your well, why your well only produced for half a month 3 months ago [as an example], it’s hard to beat the $50 a year subscription. If you have a specific question about a specific well, give the township range and section legal description and I will look at it for you. Keep in mind always that production for a month and SALES for that month, which royalty is based on are two totally different things. That is the most common error that people seeking production information make.


#729

Dale, Free method: North Dakota oil and gas website: choose general statistics on left hand side of home page. Then monthly production report. Then choose year and month. You will have to collect data by month and aggregate in your own spreadsheet.


#730

There is clearly a need for some more regulation to make these oil companies behave. However, given the amount of money involved, and the fact that the ND Legislature has an unnatural fixation on right wing social issues (abortion, birth control, and gay marriage), the chances of anything getting done are close to zero. I suppose those issues are easier to deal with than meth labs, violent crime, crumbling infrastructure, man camps, etc… I have had payments suspended at the mere whisper of a title claim and had the oil companies cite title opinions prepared by counsel who are not even admitted to practice in North Dakota. These companies are used to getting their way in states with docile populations (Texas, Oklahoma, etc.) and have brought these attitudes with them to North Dakota. Totally, ridiculous. And, no, I am not an outsider - I am a third generation ND’r, who left.


#731

Dale, the monthly production figures are there, by month, for each well. Follow Dianne’s directions of about an hour ago.


#732

The good news is, crude oil is up over $104 a barrel. The bad news is they just shut down the only well that was paying. Gone “IA” Wonder why this time. Could they be connecting up with a gas gathering facility.

Loomer 21-4swh


#733

Deloris, they are doing alot of work in that spacing, 4 wells in DRL status waiting to be fracked. It’s a matter of time.

Loomer 21X 4A is listed as active, 59,006 barrels as of february, you “should” be paid for it any day now, i can’t see the 150 days after first sales not being up. If you aren’t actually dying for the money, I would bide my time and collect the 1.5% interest a month on it.

Deloris, since they are paying you for one well in the spacing, I doubt there is a title problem, they just don’t want to pay.

Someone once told me that XTO can’t run out of money because EXXON is the parent company. That is a cow chip. These subsidiaries exist to produce revenue, not drain it from the parent company. I believe that XTO is funding further development from the proceeds of producing wells, taking full advantage of mineral owners who do not have marketable title. It can take a year these days to do a simple probate in ND so even if people know what to do, have the cash and willing to pay what is needed to get in pay status, they simply can’t get it done.

Proceeds from the wells are just not keeping pace with expenditures for drilling and completing new wells. Oil companies are great bean counters. They could easily mortgage the land to get a development loan. It must be cheaper to not pay mineral owners, since so many are not entitled to interest, than it would be to borrow the money elsewhere. If ND law was the same as Oklahoma in that the operator still had to pay 6% interest even if you had bad title, operators would be making alot more effort to clear title and pay.

Even though by law the operator is supposed to pay interest whether you ask for it or not, I doubt it will be on your first check, sort of testing the waters to see if you know you are owed interest or not.


#734

Mr Kennedy.

I have access to the WELL FILES via my subscription. The graphs with all the squiggly’s are a puzzle to me. Which marks or remarks indicate good oil. What is a cheap well? Does it have anything to do with the number of frac stages? I see a lot of 30 stages. I was also curious as to how come all of our permits are in various stages of completions both in 150/99 sections 4 & 9, 3 & 10 and 151/99 Sect 34. It seems like it should be good. Is there a down side. They are tapping into the middle Bakken and the three forks. Could this be just a fishing expedition going on? Or are these wells for real? 14 wells! If it sounds too good to be true, MAYBE it is!


#735

r w…my friend is going to email the complete legal to me and I will forward it to you. Thanks so much for your help and also to M Barnes!!! I told my friend they’d be someone on here that could help and we really appreciate it!!!


#736

I’m glad I am not waiting to pay the rent for when these wells pay off.

It is really a complicated state of affairs and as time passes they think of new ways to gum up the process. Could we petition the NDIC to adopt more stringent rules. Make the penalty hurt. I was reading on the stock page for XTO. Seems as though they were purchased by Exxon to get more into the gas end of the industry. This might have been old information I was reading. On these wells they are flaring off all the gas. Something about not being connected to a gas gathering facility.

I was hoping that there wouldn’t be a title problem since we have a producing well in that space. Same with 20936 24-34seh and 25378-41x3f. I am anxious to see the check information on XTO to see if they are going to pay anything on the new wells this month, I keep saying “maybe next month”.


#737

You are forgiven, but I think the “snort” should have been for L Barnes.

Maybe we could get a hairy eyeball from 60 minutes or tweet and twitter until we can’t tweet or twitter any longer. That seems to be where the squeaky wheel can get a little grease. I thought that NDIC had a big fist up to protect us from the stiff arm of operators.I put my faith in the devil. I remember reading a press release on Denbury’s website that they got their leases in North Dakota for “little to nothing”

Guess I will go stick my head under the covers. I feel a baptismal by fire might be in the works. I’m going to hang up my “pollyanna” hat.


#738

Deloris, Exxon did purchase XTO to get into the natural gas business but they switched to oil as quick as they could when gas took a nose dive.

Many of the companies in ND are still stretched to the breaking point, it’s a matter of hog as many acres as you can before someone else gets them. I do see signes of things slowing a little, mostly because the real cream has already been held by production. I think the rig count has only dropped 5% from the all time high though, some people have predicted doom and gloom because of the 5% rig drop. The drilling pace is still as fast as they can go with the 95% remaining. Very rarely will you see a rig parked on location more than a month.

Deloris, as much as I hate to say it, we pay the NDIC but they don’t work for us, they are there to help the oil industry. The politicians are the only ones who could help us and mostly they are unwilling to do so. Can you imagine how bad it was with operators not paying royalty or interest when warranted for them to change the law to say that the operator must pay interest if you have marketable title? I believe it was horrifically worse than it is now. Deloris, you got a snort out of me when you said the politician had never heard anyone complain before ; )

The NDIC is supposed to be there to prevent waste. I believe 1 billion dollars worth of gas is going to be flared off this year, extremely rich ND gas, mine has a btu rating of about 1.4. The dry gas that goes to your home is probably 1.0 in comparison. My gas also sells for alot more than how the state calculates it. The state calculates the value as all dry gas. The operator gets a 1 year flaring exemption when the well first starts producing and produces the most gas. Many wells decline so that it can be argued that a gathering line is not economical, mainly because the gas that WOULD have paid for the line was flared off in the first year. The reason? Every dollar spent on gathering line is a dollar that couldn’t be spent on leasing more acres and drilling to hold them by production.

The operators wanted a conquest of ND by storm, to keep leasing cost lower and royalties low, the NDIC did everything in their power to facilitate this and continue to do so to this day, instead of making operators act prudently to prevent waste because it would have slowed things down and allowed the mineral owners a chance to become more informed and probably would have reduced the operators profit by 5%. That the people were sold out for so little dismays me, especially when the operators might make 5% more from the capture of the gas. The illogic astounds me.


#739

Deloris, a frack stage can cost anywhere from $20,000 and $200,000, the first being the simplest sand frack with cheap sand and the second being the most expensive with ceramic [artificial] sand and many chemical additives. Imagine how much additives you would have to put in 1 million gallons of water for them to make an effective difference, tanker truckloads. Silica sand is cheap, ceramic propant the last time I looked was $0.38 a pound. This would be millions of dollars alone for ceramic propant for the average well. I have one well like that which they tell me cost 14.5 million dollars and it was only 24 frack stages, 2/3 of the cost was completion, fracking.

A cheap sand frack well may only cost between 6 million and 7 million dollars.

I am glad you are getting paid.

It’s not easy to be patient, I know. I have a well about to pay off [I think it already has paid off] that I should be collecting 100% less cost of production. I have 2 more wells drilled in that same good spacing awaiting completion. Unfortunately my operator does not have a great track record, they mess up about 1 well in 3, not beyond repair but nearly. They lost the wellbore on one of mine last year and had to plug back, mill a 6 inch hole in the casing and basically working through a keyhole drill a new wellbore in a different formation and complete it. It worked out, but if they couldn’t do it right the first time with a blank canvas, I didn’t have much faith in them being able to do it through a keyhole. It’s all going to work out in the end and my rent is getting paid, but like so many others, I would enjoy a little more breathing space. It’s coming, I just have to be patient.


#740

Delores, I’m so happy for you that XTO is finally paying. Do you think your contact with Mr. Boudreu helped move it along? Do you mind me asking how long it was from when your well (s) started producing until you got paid? We have good title and have been waiting nine months to date.


#741

Thanks for sharing that Delores. Will give us some hope we are getting close. XTO employees have told me that we will get a division order before we see any payments from the new wells even though we are in the system. Was that the case in your situation? We also use the XTO website. It was a nice surprise to see it so early this month.


#742

I must be wrong. Maybe I was thinking of wells still on confidential status. It’s still handy to have the entire history, month after month, year after year on one single page and it already exists and should be available free.

The other benefits, the ease of location of the information and acess to all of it within seconds, acess to the wellfiles. Acess to nearby wells without having to make more searches, and all of their information, is handy to have. Ever wonder if you have more than one produceable formation? The spacings within 2 miles of yours could provide the answer because they already have a well in that formation. I find answers to questions I had not considered asking yet with the basic subscription. If you aren’t interested and will not use the subscription, like any other subscription it will be worthless to you. If you don’t have a well yet, I would say it’s a good thing to have. If you have questions pertaining to your well or wells, I think you will have a better chance of discovering answers from the wellfiles than you would from making a phone call to someone who just wants you off their phone and will tell you anything to achieve that end.

If you have more than one well or wells in more than one spacing, or have no well and want to collect information on your neighbors and their operators wells, the basic subscription is a great labor saving device. Everyone gets to place a value on their personal time, how many hours would the subscription have to save you before it paid for itself?