Oil Activity Stephens County OK

#22

If you are looking at the small set of cells (J3,4,5) through (P3,4,5) that have Royalty Interest (RI) and bonus, it is only regarding the bonus. Lessees pay a higher bonus for a lower royalty interest payment since it is only a one time payment at the start of the lease. If you look at the long lifetime of the actual production, the higher royalty usually yields a much better return on royalties because they pay more over time.

The decline curves were built using a generic Woodford decline, so this is not as useful for a Mississippian well. It is also not useful for Woodford from Stephens county versus Canadian. (I know, because this is my spreadsheet that a developed from a few years ago). I have modified it further through time. Use it with caution if you use this version. I built it to see what future value a certain bonus amount might give me. It also was useful to put in different price structures to see how that might affect my decisions.

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#23

What I mean by playing around is pick one of the 3 variables and put a extreme value in it and check the results.

#24

I see Martha. I did find the spread sheet helpful and even real better using now knowing it was you that put it together. What do you figure the curve in Stephens County out there around Velma? And how long is the curve be? (length of production time)

#25

“…even FEEL better…”

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#26

Depends upon which area of Stephens, but we had the engineering work done on all of our horizontal wells and they are forecasted to last decades. Their software cuts off at fifty years and some were still going at very low rates. They history match the past production and then project for the future. The software may go for fifty years, but he would say “is it really that accurate?” Bankers might care about five years, as mineral owners we might care about 25 years of decline and our kids want to know about that last 25 years. The longer a well goes, the more predictive it actually becomes since we have good data for a long time. Hard to predict from only a few months.

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#27

Thanks for the info. The other thing you had in the spread sheet i varying number of wells per section. I have been looking at 1 well only. How realistic is it to see more than 1 well/section?

#28

It depends upon where you are. In sections with horizontal drilling, it is very common to see multiple wells. It was why I built the spreadsheet in the first place. Knowing that it was just an estimate, I was trying to get a feel for potential payouts. My newer version has better columns for taxes, post production costs, etc.

#29

Thanks Martha. I thought about the taxes on the front end; i.e. bonuses.

#30

Martha, is there a web site I can go to which breaks down price of crude? Is Oklahoma crude WTI or Brent or…etc.

#31

Never mind. I just found OilPrice.com.

#32

I use eia.gov. You can get the Cushing oil price there. Not so good for gas. I get that elsewhere.

#33

I’ve been using OilPrice.com as I said earlier. However, when looking at the Oklahoma list I find there are 4 OK types; OK Sweet, OK Sour, West OK Sweet, and OK Intermediate. 3 of the 4 are usually +/- $2. But the OK Sour is more than $10 less. Is there a source which tells where each of the OK types are located?

#34

It will be by reservoir. You can probably tell from the BTU on the check stubs. I don’t know of a list, but someone might.

#35

I understand I should get the first check stub in March or April from Continental. I’ll look then. Thanks.

#36

Oh, what is the conversion BTU=xxxx?

#37

In general 6000mcf is the same BTU value as a barrel of oil. It is actually a bit less, but 6000 is easier for multiplication. Sour means there is more sulphur that has to be extracted out. Not a chemist, so not my wheelhouse.

#38

I found out a couple of weeks ago that the actual owner/operator in S20-T01S-04W is Cheyenne, not Continental. Worked out through the long winded court action between Cheyenne and Continental. Then, icing on the cake, Cheyenne gave Continental take ownership of S21-T01S-04W (section I own some there also). Cheyenne said they have drilled but not producing yet in S20 and were finalizing pooling. Who knew?!?!

#39

Begging the Obvious, what is a Water Supply System?

http://www.occpermit.com/WellBrowse/Webforms/WellSearchResults.aspx

#40

asking about Sec32-2S-4W: any oil drilling ? Natural Gas? have offer from Ace Energy, LLC.

#41

Welcome! There is some horizontal drilling near you for oil and gas. Do they want to buy or lease?