Hello Forum,
We’re in Grady County, Section 8-8N-5W. Anyone else see a huge dip in production from May to June? Is it a coincidence that Flywheel/MidCon just took it over? It’s a head-scratcher because things had been pretty consistent for a while. Also with energy at even more of a premium these days doesn’t add up, literally.
Thank you
Yes, our royalties have dropped to a little less than half of what they were previously. I have not heard any reasons or received any notices as to why. If anyone hears anything I would be very interested to learn more about why the sudden decrease in production.
Wells have a normal decline over time as the production depletes the reservoir. Combine the normal decline with varying product prices and you can get dips up and down. Oil prices were in the 90’s in May but dropped into the 60’s and 70’s in June. They are back around mid 80’s now. (WTI). OK prices are usually about $5 lower than WTI. Gas had its own swing, but delayed by about a month.
Your statements usually reflect oil revenue at a one month delay from production sales and gas at a two month delay, so today’s headlines do not show up until months later on your statements.
Another factor that can cause dips is frac’ing from wells within a one-three mile radius. They shut in neighboring wells to protect them from a pressure hit from the frac. Most wells recover after turning back on, but not all. Probably not the case here.
As you mentioned, Flywheel was transferring wells from Ovintiv, so there could be a bit of delay in the difference of the check cut dates. The production reported to the state has an increase in both oil and gas in May when it was Ovintiv. I see a big dip in oil and gas sales in June from Flywheel, so probably part of the turnover. You can keep an eye on it in the Ok Tax site. Do you need a link? Thinks will probably even out in the next few months.
Yes, please send a link if you have a moment.
And thank you for the thorough and insightful reply!
Martha’s covered the big ones. The piece I’d watch hardest is the Ovintiv to Flywheel handoff she flagged. Operator changes are the most common moment for a royalty to quietly go wrong: the new operator rebuilds its pay deck from transferred data, and decimals get keyed wrong or owners get dropped.
I believe the site she means is the Oklahoma Tax Commission Public PUN Search on OkTAP (oktap.tax.ok.gov), free and no login. Pull the monthly volumes the operator reported to the state for your lease and line them up against the volumes on your check stubs. If the state holds steady but your stub volume fell, that points to a pay problem, not decline or price. If both fell together, it is likely the turnover delay Martha described and should recover.
The data is free at that site. Eureka runs that same stub-against-state check start to finish.
Are your stub volumes actually down, or did the dollar amount drop while volumes held?
Be very diligent in keeping track. We had the new operator reporting one volume don’t to the state , a different amount to the royalty corners, and their investors s different amount.
Thanks for this post. I just received a paper Royality check from Flywheel. And checking on Energylink. did not see any invoices from them. So it looks like Flywheel is in charge now? but doesn’t have the records straight?? Do I need to setup a new ACH with them now?
Here is the tax site.
Keep your last statements from Ovintiv for seven years for IRS purposes. Also to check the decimal to make sure it does not change when it goes to Flywheel. (FW Midcon). When you get the new statements, check to make sure that the decimal for each well did not change. Keep those statements for seven years as well.
Flywheel is on Enverus, so your statements may already be there.
All stuff we would never think about - thank you so much!
Seems the oktap PUN page only gives you production information for the last 12 months. How do get production data for the past years? I need it back to 2018.
Gross Production This is the link to obtain historical data. Instructions in the Form.
Production history consists of crude oil and natural gas production volumes reported to the OTC. Production volumes are made available on a lease basis using the OTC assigned Production Unit Number (PUN). Information is only available from July 1990 forward. Search for PUNs by county or legal description.
Cool, thanks.
There is a cell that requires an “interest owner” to provide an affidavit. Is there a form for the affidavit and/or what’s required on the affidavit?
Same issue for me in Garvin County.
Give them a month or two to get caught up and see how sales look then.
We called Flywheel and emailed the last two statements to show the discrepancy. The woman we spoke to admitted something must be wrong and now they’re looking into it. You have to leave a message but they called back within a few hours. The Oklahoma number is (833) 373-7135
Excellent move! Keep documentation of everything.
