Jimmy, There is no video of the software. All the companies are working in conjunction and there are to many to list. US shale drilling and production will go down in history as the largest collaborated drilling effort ever know to mankind. They are on a mission to control the world’s oil pricing and supply for a very, very long time. Go USA!
Martha Your thoughts: The House just passed the Omnibus spending bill including the lifting of US oil exports ban. If the senate does likewise, AND the WH doesn’t veto, what should that do to WTI prices if anything?
Jimmy, Bloomberg reporters believe it will stabilize oil prices and prices will be from $60 to $70 sometime in second half of 2016 or first half of 217 barring no major conflicts in the Middle East or Venezuela. Yellen indicated in her Fed announcement yesterday that she expects oil to stabilize and move higher from there. Today, I read reports that US will export 18% to China and a much higher percentage to Latin America. Japan will pick and chose from countries based on competitive pricing which includes US, but shipping costs increase our prices and Japan’s refineries are not designed for the sweet WTI. The spread between the global Brent price and WTI is not economical right now, so that could hamper exports. However, what the Bloomberg report below doesn’t mention is that the Middle East is writing contracts to supply Asia and the US is still importing heavy oil, so if US stops importing oil our shale production will have to increase to supply domestic demand. The reason US doesn’t just stop importing oil is because our refineries are not designed to handle the sweet WTI and they are making huge profits from importing heavier oil which they can use to fund their redesigns. Goldman Sachs believes oil will go down further in 2016 which makes since due to the situation with our refineries, but Goldman doesn’t take into count that production will come down very fast when oil falls to below $30. Russia simply can’t continue to produce below $40 and Saudi’s are having to sell bonds to raise funds to support their citizens and they can’t continue to sell bonds. http://www.bloomberg.com/news/videos/2015-12-16/wti-brent-spread-ma…
http://money.cnn.com/2015/12/18/investing/oil-prices-2016-opec/inde…
Martha I want to send you the section of the pooling order that has the option I took but there’s too many characters for Mineral Rights to accept. It’s confusing to me but I sure would like you to peruse it. Any ideas?
Jimmy
Good morning Martha
No, AEW has not sent me a lease agreement yet.
Jimmy, AEW may include you in the pooling, but if they offer you less than you agreed upon you can protest the pooling, because you have proof of their original offer and mailing. Did you have your own lease prepared or were you going to use AEW’s lease?
Thanks Martha Think I understand however, if they pool me and they offer less than the 1/5th I originally wanted in the offer letter they sent, should I still contest it? Especially since you say they word the leases in their favor. Guess I’ll wait and see what unfolds. I’ll contact you as soon as I hear anything from them. Thanks so much!!
Jimmy, Call Oklahoma Corporation Commission (OCC) Mineral Owner’s Helpline 405-521-2613 and tell them what has happened. By law you should have received a ‘Notice of Forced Pooling’ from the OCC. Ask them if you are named under the forced pooling and what the pooling elections are. The elections should not be less than the cash consideration and royalty interest you checked on AEW’s lease offer letter.
Jimmy, If the Pooling Order of the Commission you got yesterday has an election equal to or greater than $100 & 1/5th, I’d think I would select the best election and send it back by certified mail with return receipt well within the time period and send a copy to the OCC certified w/return also. Now, if there is an election in the pooling order that gives you 1/4th royalty and no bonus you will not get a check, but the 1/4th will provide much more income in the long run. If all the elections are less than the $100 & 1/5th you should call the OCC and tell them AEW has not acted in good faith, tell them you have proof and ask them to help you.
Martha, just received in mail a “relief Granted” order from OCC to allow AEW to pool owners in Sec 9 T18N R23. however I had already sent in my Cash Consideration and Royalty percent to AEW last month. Will that be honored or do I have to re-do it and send to AEW again? I did receive back my Certified receipt from AEW. Thanks, Jimmy
Jimmy, You can wait and see or you can call AEW and request they send you a lease. However, pooling may not be a bad thing when you don’t have your own lease prepared, because the companies word their leases in their favor. If you do sign a lease don’t accept a ‘sight draft’. Personally hand over your lease in exchanged for your check.
In their letter I checked the option of $100/acre and 20%. Sent it back to them Certified and got my return receipt that is was delivered and signed for by AEW. If I get pooled at 1/8th, guess I’ll have to protest. As for the lease, I will probably wait to see what they send. Am I on the right track here?
Martha, here are excerpts from the OCC mail I got yesterday: :Relief Sought: Pooling" “Order of the Commission”. Relief Requested (from AEW) “To pool and adjudicate the rights and equities of the owners named in Exhibit A (I’m listed) underlying lands described above and to designate the Applicant as operator” Applicant requested a “unit” pooling order covering owner’s rights in all wells drilled and produced on the described drilling and spacing unit". Then it states- “Relief Granted. The requested relief is granted and the rights and equities of all owners named in Exhibit A are hereby pooled, adjudicated and determined in the lands described in the caption for the following common sources of supply”. It then lists Mississippian, Woodford and Misener-Hunton. It then states owners must make an election within twenty days from the date of this order (12/15/2015). As I said yesterday, I already sent letter back to AEW last month on my choice of $100/acre and 1/5 royalty.
Jimmy, Yes you would receive the $100 + 1/5th. And, yes you can add the No Deduction Clause, but AEW may refuse to accept the clause. I can’t tell you what to do, but I always talk to the OCC and write letters of complaint, if necessary, when companies don’t play by OCC rules. Each mineral owner has to decide whether it’s worth their time and effort. AEW knows you have a small interest and may be betting that you won’t protest.
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Steve, US refineries are developing ways to acquire new heavy crude streams to replace more expensive imports of high-quality crude oil. That’s why the Keystone pipeline could important to us, because it costs less to pipe than ship. They will use the NGLs produced from shale formations to help liquefy the Canadian heavy tar sands crude and push it through the pipelines. Then, since it costs so much to change current refining setups to refine lighter and sweeter crude, the U.S. will continue to import some heavy crude and blend it with the light crude and start exporting light crude to counties that don’t have refineries equipped to handle heavy crude like China and Latin America. Also, the older US refineries have been redesigned to produce Ethylene Glycol which is produced from ethene which is derived from NGLs and has more than 70 commercial applications like making fiber and plastics. Ethylene Glycol is highly toxic and can not to transported, so it will be used to manufacture products and exported to developing countries.
Jimmy, Cost overburdens usually apply to waste removal that is necessary to get to the product. AEW may be applying a $10 cost overburden for removal of formation water. If that’s the case, you would do better signing a lease where you have added the No Deductions clause. I’d call the OCC and tell them that you have negotiated in good faith, have accepted AEW’s lease terms and that AEW is refusing to lease your interest making their pooling order erroneous and wrongful.
Martha, But if I’m listed in the pooling order BUT have already chosen the $100 + 1/5th, would I still receive that option? Once I get their lease can’t I add the No Deduct clause and return?
Good morning Martha, The proposal letter from AEW dated 10/29 offered participation, $200/a + 1/8th, $150/a + 3/16ths and $100/a + 1/5th. I chose $100 + 1/5th and sent back first part of November and received certified confirmation. The OCC Pooling Order lists Participation, $200/a + 1/8, $150/a + 3/16th and $100/a + 1/5th. There’s also a $10 Overburdened Interest which I assume shouldn’t matter to me. So I think I’m ok.