Tran Unit Production (XTO)

Does anyone have a lease in the Tran Unit (Arlington, Kennedale and Mansfield)? My royalties have dropped significantly since October. I know the prices have fallen but not 70%. Is there a production issue? Have they started the third well yet? Anybody know? I am not in Texas anymore so I can’t get the scoop from the other owners. Hoping someone here might know…

Dear Bob,

How old is the well your getting production from. I have two wells near Weatherford and the first year they paid $600 a month, and then this year that has dropped to just under $400 a month. So while yes the price goes up and down, our production does too. Perhaps there are more wells to be drilled in that area. Since you out of the area, you can go to Texas Rail Road Commission and look for the GIS Viewer then you can dial down to your Mineral acreage and see what wells are permitted for your area, and what wells have been drilled and producing.

Sincerely,

Chris

Coming up on two years. The wells were averaging around the same and then slowly came down. All at once they dropped to about $150 a month. The second well is only about a year old. XTO says they are going to start a third but I have not heard anything in a while, Prices started out around $4.40 but I noticed the last pricing from my statement is around 3.10. The drop in production is curious.

This graph will perhaps satisfy your curiosity.

Oil producers are not idiots. They will not produce their assets at 100% absolute open flow (well they never do anyway) when prices are depressed. As pricing improves, there is more encouragement to produce the asset at it's higher or best value. Small producers do not really have this luxury as much. They need the cash flow right now to fund overhead.

This graph shows prices per mcf at standard pressure and quality at 1mmbu per1mcf.