Woods County, OK - Oil & Gas Discussion archives

Oil & gas discussion group for those interested in Woods County, OK. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.

Hello everyone. I am new to this forum and to the whole world of mineral rights. I am hoping to find others who are leasing in Woods County so you can help me out.

This is my first time writing in this forum.

I and my sisters own mineral rights in Woods County but we live in Nebraska and we sold our surface land. We renewed a lease with Chesapeake in 2008 for 3 years. Upon investigating whether or not our lease would again be renewed we discovered that a horizontal well had been established which reached under our section (24, Township 28N, Range 18W). Apparently, although production began in late 2008 we were never notified or sent a division order. First, Chesapeake denied we even had a lease with them. Then they claimed that they had not sent us a division order because they didn’t have our addresses!! Now, they say they will send us one, but won’t give us any information regarding the extent of what natural gas has been retrieved or how much we are owed until we sign the order. I believe that the well is called Beehive and the entry well is actually in section 13 (north of our section 24).

Thus, my questions…

Does anyone know anything about this well, how it is producing, how many parties are involved etc.

Has anyone heard of this type of thing happening before…are we entitled to interest on the monies we should have already received?

Any suggestions on where we can go to find out such info?

Do we need an attorney? etc.

Thanks for any help or info anyone may have.

Joni Gray

Wow Joni, I had read about those types of wells being drilled. I am also new to this and am wondering about the landman now as he has not contacted me again. Your property is close to mine my range is 17w. I guess we need to investigate somehow but I am also in the dark. Any info would be greatly appreciated from the more experienced owners out there.

Thank you Joni!

Lora,

Thanks for responding. It is very frustrating not being able to just drive out there and be able to actually see what is going on and be able to talk to the people who are actually living there. I am assuming that some sort of pooling had to be done but when I try to find out more info. from the internet I just seem to get lost and frustrated. I know the information is there but I just can’t seem to get to it. I’ll keep you updated as things develop.

Joni

there are 3 Beehive production streams listed in the public source. 2 of them look to be from a vertical well drilled in section 24…1st production 2/2009. There is also a well drilled in section 13 with 1st sales 2/2009. Both wells are listed as Devon operated.

It looks like there MAY be two wells drilled under section 24 from section 13 located SESESE of section 13. One of the wells is numbered the 1-24 & produced from two formations at different times (Simpson 1st, then, Mississippi). the other well is the number #1-13 @ the same spot location. They are a little weird as horizontal wells are USUALLY noted by either a different API number or well numbering, or bottom hole location listed but, these are not?

Sounds like you are about to get the paper work in place to get your past & future revenues. The OCC also has production records that they can tell you how to access through the internet.

In the past, mineral owners don’t have anything in their lease that requires the operator to provide production information. If you ever have the opportunity to sign a new lease, you can get it in there next time.

Thanks Nick and Joni. What do I say when calling these folks? I have no lease or prior lease at this point. Joni, one of my properties is right next to you in range 17W. This sounds exciting now! Does anyone have pictures of what the area looks like? I entered it into Google Earth and that was fun.

I also saw on the news that Obama wants to pursue local oil and gas so that is also encouraging!

Thanks Nick. So how do we go about finding out if these wells are going into our property and how do we get paid for whatever they have taken out? The landman has not contacted me for several weeks now as if he has lost interest and that is making me a bit suspicious after seeing these comments from Joni. Where do we go from here? Any advice is appreciated.

Thank you for the info. Nick. I have found that the Oklahoma Corporation Commission can be very helpful. They let me know that a spacing unit was formed that includes all of section 24 for the Beehive entrance Well in Section 13…thus, we should have been included and received our share. We are currently in the process of getting a Division Order agreement signed, which Chesapeake has said will lead to us getting our past and future royalties…

They didn’t tell me anything about the other 2 Wells actually drilled in section 24…do you have any more information on exactly where in the section they were? We have the South half of the Southeast block in section 24.

Thanks for your help,

Joni

Lora,

I’d recommend you try calling the Oklahoma Corp. Commission…they are the oversight agency for Gas and Oil in Oklahoma…

Remind me, where is your land located exactly? If I come across anything else that might be helpful I’ll let you know.

thanks, Joni

Lookin for any activity in 25N 14W

Wow. When I watched the videos about how it works I was wondering if they were doing horizontal drilling on our sections. I would appreciate info from the more experienced people here if possible.

Lora,

I think that the Well Nick referred to …the Beehive 1-13, might have its Bottom hole in section 17…but the numbering for the Well doesn’t match with that and that’s off the top of my head and without looking at the map… I just know that the 1-24 Well’s bottom hole is in 24 so that is the one we are entitled to royalty on… However, there are other Beehive Wells with bottom holes elsewhere and I seem to recall a referrrance to Section 17.

I am retracting my comments about the helpfulness of the Oklahoma Corporation Commission. They gave me the production information about the Beehive 1-24 Well…Simpson formation…HOWEVER, Chesapeake claimed they were inaccurate numbers…that there had not ever been any more than 3 Mcf’s (or whatever the correct accronym is) for that formation on the first day and then nothing else). What they had reported to the Commission were rather substantial numbers for about 4 months… BUT what was most upsetting to me was finding out that there are never any audits done… the Commission just accepts whatever numbers are given them… AND…like in my case where they say an error has been made…ALL THEY DO IS change their numbers!!! They again just accept the Company’s claim that their first reported numbers were wrong, but now the corrected numbers are the right ones!!! I kept asking for some sort of 3rd party confirmation one way of the other… like what production numbers were reported to the TAX Commission…or what check amounts were sent to the other property owners, etc. They declined to do any of those type of confirmation investigations. Our interests are small and it wasn’t worth it for us to have to hire an attorney to make such discoverys.

So… in my opinion the “oversight” Commission doesn’t actually do ANY actual oversight of any substance whatsoever.

Also, I never did get any sort of satisfactory answer to why we had never been contacted… We had a lease with them, our mineral rights ownership were accurately recorded in Woods County…the best I could come up with is that they are totally incompetent and do not expend any money or effort in auditing their own records for accuracy…so they just deal with mistakes as they are brought up by others, and then just cover them up with other claims that lack any rationale and so does not ring true on any level with me.

So… Good Luck… I’m disgusted with the whole set up…the laws heavily favor the Oil cmpanies, the burden is almost entirely put upon the mineral owners to discover whether or not anything is owed to them, and then to attempt to actually get any of what is owed to them…there are too many games being played…they get large tax breaks / rebates etc… yet, unless you have it in your lease, there are no laws that require them to share any of that rebate with the owners who also shared in having to pay the original taxes…

Sorry I’m so cynical, but my experience thus far has been a nightmare!!

Joni

referrence

Joni, Most important, don’t give up. Chesapeake enjoys acting like the big company they are but, they know the mineral owners in their wells & I feel certain that if you have a mineral interest in the wellbore, your money is in escrow. Once they get it through their thick corporate head who you are, you will be paid for past production. They are the best way for you to get the money you are due. Second, in defense of the OCC, they are not production volume trackers. Their job is to see that the wells are drilled where & when they are supposed to be drilled, completed properly &, the correct formation is producing and proper operations are carried out throughout the life of the wellbore. The Oklahoma Tax Commission is the production volume recorder but, they have a hard time sharing that information with “unknown” individuals.

Now to section 24 specifically. There looks to be one well with its surface location spotted in the SESESE of section 13 and drilled to the SW reaching TD at a lat/long of 36.896700/-99.084050, which is in the NE/4 of section 24. This well is the Beehive #1-24. The original completion was in the Simpson, API#: 35-■■■■10000. The well looks to have produced 127,150 MCF and 20 BO from 2/2009 thru 11/2009 and was recompleted to the Mississippi with first production in 12/2009 (recompletion API#: 35-151-232510001). The Mississippi has produced an additional 15,067 MCF with 865 BO and is listed as active. These production numbers can’t be cast in stone as the Oklahoma production recording system is going through a change and we have found gaps in volumes that haven’t been cleaned up yet but, I think these numbers are at least a staret to show that production havs been taken from section 24. I don’t know where your minerals are but, if the Simpson &/or Mississippi is spaced 640 you should have an interest in the wellbore.

Looking @ the immediate area, it appears that Chesapeake has 2 additional wells drilling (1 permitted as an SWD & 1 a producer) with a 3rd well permitted but, not listed as drilling yet. All of this activity is located in the SESESE of section 13 & the SWSWSW of section 18 and it appears they are planning to have 4 producers radiating out from this central location with an SWD (Salt water disposal) to handle the produced water from the producers. All of the completions look to be big water producers and it’s not uncommon to drill one or two wells to prove the idea they have about the productive formations then, limp along until they can get the water handling facilities in place then , either frac the wells for production or @ least start producing the wells with big pumps. Chesapeake has done this same thing almost 2 miles to the south centered around the NENENE of section 36 with all those wells producing from the Simpson.

BTW, in my previous post I had mentioned the possibility of the Beehive #1-13 also being under section 24 but, after spotting the surface & bottom-hole locations on a map, it’s not.

I had all of this written out on the forum page but, then clicked to see something & it disappeared so, if something doesn’t make sense or you have questions, please ask & tomorrow will be a better day ;0)

Thanks for the informaton. We have received some money…HOWEVER, those “127,150 MCF and 20 BO from 2/2009 thru 11/2009” is what Chesapeake claims is in error and that only 3 MCF was produced in 2/2009, and then nothing more from the Simpson. What we received was from the Mississippi, which began production in Nov. of '09. As you will notice the recorded production from 2-11, 2009 is significantly higher than the production from 11/09 forward. That is why I did everything I could to try to get some kind of confirmation whether or not what they say is true, or if the Well did produce the volumes reported…Other than take them to Court, which we can’t afford, I haven’t found any way to make them pay anything they don’t agree they should pay. I just wish I could at least know whether or not it was just a reporting error (with an explanation for how on earth such an error was made), or if we are getting taken…

Joni

let me look into it…I am traveling after Wednesday but, I have someone that will see what she can find whilst I am away, if not sooner.

**Usually, what happens is (especially with Chesapeake) an error was made on the OCC identifier causing the volumes to get updated to the wrong well. I sent the information to OCC and she will let me know where those volume really belong. She might have to get hold of Chesapeake to do that. Might be a few days before I find out. **

As I think I have done as much damage as I possibly can here I went back & read your response to Lori about several things. 1st & probably foremost, oil companies aren’t in business to protect the millions of mineral owners is produces from. It’s only responsibility is to make an attempt to contact all interested parties. An attempt can be one registered mailing that is returned for whatever reason but, none the less an attempt. It is the mineral owners responsibilty to protect their interest…Just like every other “property” or asset many citizens own across the country.

Chesapeake is a big company & operates like one. Left hand doesn’t know where right hand is kind of mentality, in my opinion.

Most oil companies are not trying to play games. they don’t have the staff, expertise or the energy to devote to it.

I’m not sure you understand the tax structure of the oil & gas business. If you check out cities & states that are weathering the economic storm ripping through this country, many if not all of them attribute a large amount of oil & gas or related industry tax revenue to their continued success.

And finally, the business is one of the last few that people have to trust other people with eventual verification.

Nick,

Thank you for taking so much time and effort. Clearly there is a lot I don’t understand. Perhaps overall the structure of things makes sense and works well. It is just frustrating as a very small owner living in Nebraska, having this first experience with actual drilling / production take place that we are included in, figuring out what is going on and then trying to get it straightened out. It just doesn’t make sense to me that the law does put the burden on the mineral owners to keep on top of knowing when a company might start doing something that affects their land when they aren’t notified. When you have a lease, you are supposed to be notified about such things…there are 5 of us and none of us have changed addresses in a couple of decades…why is the standard set so low on the company’s responsibility to make a meaningful attempt to contact the owners of the minerals they are extracting?? How on earth are we supposed to be able to keep on top of knowing what is going on???

When we finally did find out about the Well, and contacted them they denied even having a lease with us. Then, when offered a copy of the lease they claimed they didn’t have our addresses, which are listed twice on each lease, and recorded properly in the County Records. Finally, when we give them our addresses again, we receive a Division Order, which we are told we must sign in order to receive anything, or be told anything about what we are entitled to. In frustration we go to the OCC to gain some information about what we are looking at. When we receive a check there is a great discrepancy in the production amounts. What recourse do we have? The burden is on us to discover any errors they make and bring them to their attention, but we don’t have access to any of the needed information, and the access we do have is apparently frequently inaccurate. It is just surprising to me that those who know about the business and have all the information are not the ones being held responsible for reporting accurate data and using actual due diligence in contacting those affected. Clearly the current set up assures that many owners are not going to get what they are entitled to and the company’s are not going to be held accountable in any way for how bad or inaccurate their records and efforts are. That just does not seem just or rational to me.

So… how on earth are we supposed to monitor whether or not we are getting what we are entitled to?? They have all the information and knowledge, but are not required to share any of it with us.

Are there resources that I am just not aware of??? I’m happy to be educated on how to figure out what I have the burden to know…You would think that owners could at the very least be provided with such information (where / how to obtain information) rather than make each separate owner figure it out on their own.

Thanks for helping me out with this…

Joni