Can someone explain exactly what this means as far as 1) am I getting paid for MY exact oil or just a formula for “estimated production” and what else this means 2) what is a “test procedure” for and what are they testing. 3) what other pertinent information I need to know. The “procedure” seems common but I’ve heard negative things and am not sure why. Application of Oasis Petroleum North America LLC pursuant to NDAC § 43-02-03-88.1 for an order allowing oil, gas and vapor recovery unit gas produced from the Iceman Federal 5601 34-05 2B (File No. 40622), Iceman Federal 5601 34-05 3B (File No. 40579), Iceman Federal 5601 34-05 4B (File No. 40322), Iceman Federal 5601 34-05 5B (File No. 40578), Section 1, T.156N., R.102W. and Sections 5 and 6, T.156N., R.101W., Berger 5601 13-4 2B (File No. 42848), Sections 4 and 9, T.156N., R.101W., Orcas State 5601 13-4 2B (File No. 42842), Orcas State 5601 13-4 3B (File No. 42846), Orcas State 5601 13-4 4B (File No. 42847), Sections 4, 9, 16 and 21, T.156N., R.101W., Rooster 5601 12-8 2B (File No. 42524), Rooster 5601 12-8 3B (File No. 42525), Rooster 5601 12-8 4B (File No. 42526), and Rooster 5601 12-8 5B (File No. 42793), Sections 8, 17 and 20, T.156N., R.101W., Tyrone Field, Williams County, ND, wells to be commingled in a central production facility located in the NESE of Section 34, T.156N., R.101W., allowing for a test procedure for each well of a minimum of 48 hours per month, pursuant to NDAC § 43-02-03-48.1, or granting such other relief as may be appropriate.
The wells are allowed to be produced into a common facility and the monthly production is allocated to the individual wells based on monthly tests on each well. There will be a separate smaller facility that is used for the individual well tests. The advantage is lower facility costs and theoretically longer well life. If the wells are mature the production will be fairly stable and errors should be minimal. Newer wells are far more variable and monthly tests may not be frequent enough. But remember the potential error is just as likely to be in your favor as not.