Hello,
I am new to this group. I joined because my family is an interest owner of a number of wells in McKenzie County. I have managed to physically locate all of the wells except one. Nowhere can I find the name of the well. I have looked on ESER and subsurfr. But on the statement from the payer (Hess Corp) it reads Bluebuttes Madison Unit PIII. Can anyone help me find out how to locate this well and get more information about it? Thank you!
Continental was recently issued permits for 14 wells in 6 153 101. That seems pretty exciting but brings so many questions. The unit is Sections 5, 6, 7 & 8 of 153 101. Here are two of the questions I have: Does it take a month or more to drill each well? How can I determine if the drilling has begun or when it will begin?
Suzanne, it usually takes a month or more to drill each well and sometimes more than 6 months after that before they are fracked and producing. You can watch the GIS server map that you can find the link on the NDIC O&G site homepage and watch for rig symbols on the map. If itâs your first well it certainly is exciting! I wish you the best of fortune.
RW - Thank kindly for your answer. So does that mean it will take at least 14 months to drill all 14 of the wells?
It has been my experience that they will frac one well before moving on to the next; this can take a while. It also depends on the companyâs drilling schedule and how many drilling rigs they have or have rented. In my acres one well was spudded (meaning drilling has commenced). They are also drilling a well in another area of the land they have not even close to mine. I suspect they will use the one rig to drill both the current and second well in my same area rather than using both drills to get one area done. It depends on a lot of variables including how long your lease is for, they have to drill shorter lease earlier, how long they have rigs for, what their plan is, where are the gathering lines for the oil etc.
I would say you probably should look at 6-8 months before you might see a royalty. I am sure it could happen quickly, but again, this is how mine are working.
I am by no means an expert but that is what is happening with our oil company
Peggy
Suzanne, there are almost as many ways to drill wells as there are operators, some use workover rigs to drill straight down because itâs a less precise part of the well and bring in a more capable rig to drill the curve and horizontal part with greater precision. Itâs possible to get a royalty check in less than a year of the bit hitting the dirt if the operator has their own frack crews, but in my experience it usually takes about a year, considering that the well will probably be producing for months before the final title work is done and the operator begins paying. I had a pair of wells that it took 9 months to be fracked after they were drilled and I consider that to be an abnormally long time, but it happens. Some companies do not like to frack in the winter, having to keep the fluid from freezing until it is used is a chore. Considering that the operator is probably covered by continuous operations clauses once they start drilling, they are not desperate to finish. If I had to guess, I think it probably will take about a year to drill 14 wells if not a great deal goes wrong mechanically, and my cousin who is an oilfield welder tells me something always does. We will know in a year.
Thank you Margaret and RW. It was my thought that it might be 12 to 18 months before I see a royalty but I was hoping not. It is my understanding they will be using a âwalkingâ rig on this and the horizontals are going to radiate to all corners of the 4 sections from the Northwest corner. I saw a diagram of Continentalâs plan for my area on the blog âmillion dollar wayâ. I so appreciate that you have taken the time to share your knowledge with me.
I just received a letter from Woodcreek Resources out of Austin, Texas, wanting to buy producing Bakken acreage for, they say, $4,500 per acre if you have a royalty of 20%. I donât know, but I think they would probably try to bargain you down after getting to talk to you. Just to see what they would say, I e-mailed them to offer them a chance to tell me what they would pay for my acres with two new wells that I never received a lease offer or an AFE for, so they could see the production before participating. They came back with the old âwould you like to counter offer/did you have a number in mindâ garbage. Made me want to say, how about a nice shiny quarter? They came to me, I gave them some information they could check for themselves and they still couldnât hazard a guess for an offer? These people with the unsolicited offer letters seem to be all the same. They donât want to just buy acres and make a goodly profit; they are looking for the uninformed mineral owner they may be able to make a killing off of. I told them I wonât play that game and I will just have to keep it and cash all those darned checks myself. I might die of shock if I ever got a real offer from one of these letters. I honestly believe that I could lease for as much as these people offer to buy. Gotta love the oil business.
Can anyone tell me what the average production of a well in McKenzie County has been? Barrels per day or by the month, or possibly an average of barrels per month from a number of wells?
Mr. Foreman, it varies. Some of McKenzie County ranks with the best in the state and some of it is just commercially successful. You canât compare wells from 2006 to early 2009 that have as few as 1/3 of the frack stages of many new wells and they might have been fracked with beach sand instead of expensive ceramic proppant. I have some wells that were drilled in early 2008 only 10 frack stages and beach sand which probably clogs the fractures as much as it props them open that had paid for themselves in 3 years, still produce 65 barrels a day and 4 years later still have not been put on pump. These cheap wells of mine IPâd at 1,000 to 1,100 bbl, some wells recently have IPâd at over 4,000 bbl. If I know what area [Township, Range and Section] we are talking about I can generally look at surrounding production and tell what kind of area it is. McKenzie County has been massively drilled, many people have wells already and donât know it yet because the lessee and or operator do not tell them. The answer to your question would probably be 1k to 300 bbl a day for the first 6 to 12 months, depending on how the operator chokes the well, then a 10% to 30% decline depending on how the operator chokes the well. At some point the decline will level out to a long gentle slope. At the end of its productive life the wells can produce as little as 10 barrels a month. The operators get tax breaks to keep operating the wells and the operator may only turn the pump on one day a month to get whatever oil has migrated to the wellbore out. Operators can determine how little they produce by turning the valve, some months you may get very little or nothing. The operator could double production the next month to make up for it. The moral of the story is that royalty checks should be planned for but never relied upon. I think we as mineral owners need to take a page from the oil companyâs book and measure our wells by how much wealth they produce before they go dry and are plugged. Even relatively small amounts add up over a period of 30 years. If you need help looking at a particular area I would be glad to help. I hope you have already found the NDIC site and have learned to use the GIS server map so you can at least see the number of wells in your area. I hope this helps some. There really is no simple answer to average production.
Mr. Foreman, there has been a good bit of activity in your immediate area. Your well HELLING 150-101-7-6-1H operated by Liberty Resources LLC is still in DRL [drilling status], which probably means itâs awaiting fracking. There are wells to the east of you also in DRL status and more wells currently being drilled in the area.
There is a fair example of a well in the spacing just to the west of your spacing, the LINK 12-1H drilled by ZENERGY looks like it will be typical of the wells in the area. From looking at other Zenergy wells in the area, it looks like a cookie-cutter approach: same 26 frack stages (pretty good) and sand frack with no mention of ceramics, which I would consider so-so method, but it seems to work for drilling wells to a price point and getting a fair well out of it.
The production of the well just west of you: IP of 983 bbl calculated for the first day. First short 10-day month of production 6,171 bbl. First full month of production was 9,084 bbl. The next month was 2,343 for 22 days production and there had to be something else going on because that would be very atypical decline and production resumed at a greater rate and settled down in the next month of 31 days for 6,211 barrels and a pretty typical decline from that point down to 77.25 bbl a day after 15 months with a cumulative production of 60,263 bbl in the 15 months.
Zenergy did install a pump early on this well but I doubt they run it much if any yet because it really wasnât needed till about now. Not a monster well but I think it will be a commercially successful one.
Your operator, Liberty Resources, could see everything I could, would literally know where to plant the wellbore to have a successful well, how everyone else fracked their wells, and I donât think they will do much different. The wells I looked at in the area are like twins.
The first 6 monthsâ worth of checks looks like the ones that will make you most happy as it might take 2 or 3 years of production after that to equal those checks from the first 6 months. The upside is you could have 20 to 30 years of those smaller checks. I donât know if this news is good, bad, or neutral but at least I doubt you will have any surprises coming, barring mechanical failure.
60,000 barrels in 6 months, another 60,000 in 2 to 3 years, and anywhere between 1,000 and 1,500 barrels a month for years slowly declining from there to a point that they may produce the well only every other month running the pump for a couple of days (saving electricity) only to collect whatever has migrated into the wellbore.
All is dependent on the operator; they decide how and when to produce, when to put a pump on. Weather plays a factor sometimes. If you are afraid you canât get the oil to market, you would slow the well down so the tank doesnât overflow.
If it were mine, the above is what I would expect. I wouldnât expect a second well anytime soon but I wouldnât rule one out eventually. I hope this helps and good luck with your well.
Mr. Kennedy, thank you for your reply⌠The description is 150 North, Range 101 West.
Section 6 Lots 2 (40.15), 5 (36.09) SE1/4NW 1/4, S1/2NE 1/4. This property is just west of Alexandria, ND.
Mr. Kennedy,âŚthank you for the information, once it starts to produce I will let you know what it does Iâm sure that will help others.
Merry Christmas
Ron
Just a note: We all need to keep up on oil taxes, which are changing every year.
Looking at the GIS map this morning, it struck me that a massive amount of infil wells are being drilled right now in McKenzie County, unfortunately just a few miles NW of my acres, but my day will come. Iâm looking forward to seeing the production numbers from these new wells. My McKenzie County wells were drilled in early 2008 and completed with 10 or less frack stages using cheap sand, even so they are paid for now. The new wells I think will be at least 18 stage, use a better grade of sand and quite likely some ceramic proppant. There was never anything wrong with the acres, a couple of my wells have recently just had pumps installed after 3 to 4 years, and a couple of others still do not have pumps, the pressure is good. Itâs just a matter of the well technology of the times and I think itâs about to be remedied. Good luck to everyone getting the infil wells, I think you are in for a happy surprise.
Thanks for the info, much appreciated and will assist us in making an informed decision. I will continue to do research and familiarize myself with the oil business vernacular.
What is the usual procedure for investor brokerage companies who are looking to lease mineral rights in McKenzie County? They say that my share is 20 percent with none of the costs associated with leasing. No costs for overages, transporting oil, etc. Sounds a little questionable to me, I donât know who to trust. Anyone had this experience?
Mr. Kennedy, my first comment as a new member. Here goes: landowner signs 5 year lease with big oil company in 1979; that company sells it to someone else and they sell it yet again. Is the length and landowner % the only terms that have to remain constant? Can you change what you are willing to pay for such as transportation? There is production from beginning. Thank you.
Ms. LaPointe, a lease is a lease no matter who it is to. The terms of the lease can be more important than the bonus or the % royalty offered. I do not know if you are quoting the language but I can say that you need to have your own experienced oil and gas lawyer craft the language that your 20% of gross royalty will not bear the burden of post production costs such as transportation, dehydrating, separating, compressing, gathering or marketing, probably a few more to be specifically named and that the intent is that your royalty have no deductions whatsoever other than taxes, that this is a condition of the lease and that the lease terminates if your royalty is ever charged these deductions. I believe that Buddy Cotten has some ready made clauses that you could purchase from his site but you must have your lawyer work them into the lease or appended to the lease. As I first said, a lease is a lease, only you and your lawyer can decide if itâs in your best interest, and if it is not, if it can be improved and made acceptable to all parties. The language you posted sounds promising but a lease stands as a whole, if there is something in another paragraph that modifies the language you posted to only apply in the month of December of leap years or is void on any day ending in Y, then you are back where you started. A bad lease is worse than a bad marriage. In a bad marriage, you can get a divorce. In a lease you need to have everything you expect in writing, or depend on the lesseeâs charity for anything that isnât yours by right in the lease. I really think it would be a horrible mistake to depend on the lesseeâs charity. I think you would save/make more money by paying someone knowledgeable to help you with your lease. There is a good chance they could save you thousands of dollars, and many headaches.
Mr. Easley, unless specifically barred in the lease from making deductions for post production expenses from your royalty, the operator may do so. The fact that the cost of transport may have risen since 1979 should not be a shock, after all, everything else has. Is there room for abuse? I would think there is. I donât know how big of an increase we are talking about here. Some companies have more clout than others and negotiate better deals because they deal in larger volumes.
I think the operator should just be passing on your proportionate share of the transport costs, which should serve to keep them as low as possible, the operator doesnât want to pay more than necessary. If you think you are being charged more than your fair share, I think you could audit the operator. It would be costly, I would try to gather as many of the other mineral owners and interests in the well to share in the expense. Who knows what an audit would turn up. I also think itâs good policy to let those you have a business relationship with know that you are watching. If your interest is small, there is probably very little that you could do that would be cost effective. If your interest is large enough I would do the audit whether anyone else shared cost or not.