Oilfield​

[Caustic Burno]

Interesting turn of events (the condensed version):

Over the past couple months we received 3 additional tax statements for oil royalties. I paid them (that's what I do when I receive a bill/statement) but my husband questioned the production. Turns out we were charged for literally 10,000 barrels more than we received; their reasoning was "projected production", based on the prior year and assuming some of the wells would be re-fracked. What the what?!? Hubby spent quality time on the phone with the county Treasurer and Thursday we received a refund check for a little over $4K. I was gone all day yesterday but Hubby got a call from the CFO of the Oil Co, thanking him because they also received a refund. So now they're grateful and have more incentive plus extra $$$ to fix/clean up the one well, fix one of the electrical lines and install the roads. We'll see how this plays out.

And on a side note (shameless self promotion), the oil company names all their wells after a song. I have no idea why. Evidently they like me and named one of the wells Lil' Red Kevette. Woo-hoo, I'm being immortalized by a combo of fracking and Prince . Unfortunately that well is currently out of production - but at least I can occasionally look at the sign and get a cheap thrill.

That is a scheme of the tax district.
They know on a gas well 50% of the production is in the first year with diminishing returns over the next 9 years. The average oil well in this country produces 16 barrels per day as well. The well may produce over the next couple of decades very few will equal the production of the first
year even on an accumulation basis.
Seems like I have to fight the idiots every year.
The biggest PITA is an old well on my grandpas place that been producing since the 40's. lucky if you get a 250 dollar royalty check a year.

 

[Brute 23]

Your right Craig I don't know anything about it and I find it strange that an oil company can just set up on property without any input from land owners. Seems to me if they didn't do what they should you can just shut them down but I guess the money is the root of the problem.

The mineral owners make a contract with the o&g company basically on the terms of their partnership. There are also environmental rules set by local, state, and federal agencies. All that only works if some one is willing to enforce the terms of the contact or the regulations.

The dicey part is mineral ownership usually trumps surface ownership so the owner of the surface doesn't always get to make the rules.

Everything is negotiable so even though he knows he will end up doing what the mineral rights owner and the OG company wants to do he can negotiate compensation. I own some minerals in Robertson County and surface owner sued O&G company and actually did get them to relocate a drill site by a couple hundred yards.

That is why I said "usually". There are some things like houses, existing structures, existing processes, etc that you can't mess with. Yes surface owners can sue if they feel they are not receiving a fair price for damages. For example we built a pad fairly close to a land owners cattle pens one time. He came back and said he was having trouble working his cattle and getting them penned because of all the new commotion. It was borderline but for the sake of getting along we relocated and rebuilt his pens further away.

The only thing a surface owner can control is water, which has always been funny to me but it makes sense. Only exception is they can't stop a mineral owner from using it to harvest the minerals.

My family turned down a lease during the gas boom on a place that we own the minerals but not the surface. My dad would not go for it because he said he did not feel they were being fair to the surface owner.

 

[TexasBred]

Jupiter Sulphur plant is in Ponca City, a carbon black plant, and ConocoPhillips too.

(I had the misfortune of going thru Evadale Tx recently--didn't smell as bad as it used to, but I still knew where I was before I got there.. )

GB first job I ever had was building a bride in Evadale. It was definitely a funky place but most of it was from a paper mill. Sour Lake also had quite a funk. Both had huge mosquitoes...must have been something in the water. :lol2: :lol2:

 

[TexasBred]

That's funny. Some of them get pretty creative with the names.

That is total bs on the taxing deal. Most wells have a 60-80% decline curve.... and they don't get to tax you on some thing that may or may not happen. That's like them taxing you on a pool that hasn't been put in yet.

Their county tax assessor's office is operating off the grid!!! Its like taxing a beef producer on next year's feeder calf sales!

Around here they tax based on the previous year's production.

 

[Caustic Burno]

Jupiter Sulphur plant is in Ponca City, a carbon black plant, and ConocoPhillips too.

(I had the misfortune of going thru Evadale Tx recently--didn't smell as bad as it used to, but I still knew where I was before I got there.. )

GB first job I ever had was building a bride in Evadale. It was definitely a funky place but most of it was from a paper mill. Sour Lake also had quite a funk. Both had huge mosquitoes...must have been something in the water. :lol2: :lol2:

Be sure to get a cool glass of water if you stop in Sour Lake unforgettable experience.

 

[greybeard]

Jupiter Sulphur plant is in Ponca City, a carbon black plant, and ConocoPhillips too.

(I had the misfortune of going thru Evadale Tx recently--didn't smell as bad as it used to, but I still knew where I was before I got there.. )

GB first job I ever had was building a bride in Evadale. It was definitely a funky place but most of it was from a paper mill. Sour Lake also had quite a funk. Both had huge mosquitoes...must have been something in the water. :lol2: :lol2:

I assume you were building a bridge and not your wife.....

Coincidence, but my first real job was also building a bridge. The I-10 bridge over the San Jacinto River between Baytown and Channelview. I really enjoyed it, but the things my brother and I did on that job would not be allowed done today. (like standing atop the 30" X30"" concrete pilings with a jackhammer and cutting 2-3' to expose enough rebar so they could pour the horizontal structures that the bridge beams would sit on. No safety lines--no scaffolding, just lean a ladder up, climb up and pull the jackhammer & hose up with a rope and go to work.)
Evidently, we had a lot better balance and not near as much fear or common sense back then.
Did other stuff as well, swamped for a dragline, ran a dozer covering board road, shoveled asphalt, drove a water truck to wet down the new pours while they cured...
Austin Road and Bridge Co out of Dallas was my employer.
I really enjoyed that job too.

 

[TexasBred]

Jupiter Sulphur plant is in Ponca City, a carbon black plant, and ConocoPhillips too.

(I had the misfortune of going thru Evadale Tx recently--didn't smell as bad as it used to, but I still knew where I was before I got there.. )

GB first job I ever had was building a bride in Evadale. It was definitely a funky place but most of it was from a paper mill. Sour Lake also had quite a funk. Both had huge mosquitoes...must have been something in the water. :lol2: :lol2:

I assume you were building a bridge and not your wife.....

Coincidence, but my first real job was also building a bridge. The I-10 bridge over the San Jacinto River between Baytown and Channelview. I really enjoyed it, but the things my brother and I did on that job would not be allowed done today. (like standing atop the 30" X30"" concrete pilings with a jackhammer and cutting 2-3' to expose enough rebar so they could pour the horizontal structures that the bridge beams would sit on. No safety lines--no scaffolding, just lean a ladder up, climb up and pull the jackhammer & hose up with a rope and go to work.)
Evidently, we had a lot better balance and not near as much fear or common sense back then.
Did other stuff as well, swamped for a dragline, ran a dozer covering board road, shoveled asphalt, drove a water truck to wet down the new pours while they cured...
Austin Road and Bridge Co out of Dallas was my employer.
I really enjoyed that job too.

Yes I definitely meant "Bridge" GB....and yeah I've done a lot of whta you talk about. And no there was no safety program. lolol Don't remember anybody ever getting hurt though other than overheating.

 

[Brute 23]

There are quite a few studies showing that these major companies safety is getting worse as their safety programs get more extensive. We are hearing that out of a lot of our safety people. They are saying once the programs get too big it has the inverse effect.

 

[Craig Miller]

There are quite a few studies showing that these major companies safety is getting worse as their safety programs get more extensive. We are hearing that out of a lot of our safety people. They are saying once the programs get too big it has the inverse effect.

I agree with that. We have what we like to call a common sense safety program. We dont just create rules due to every incedent. I used to work for a larger company whose name rymes with nabors. That have a policy now where they have a no entry to the rig floor with out getting a permit to enter the space. :shock: They've had the no entry catwalk buffer zone since before I left. What a pain. Forklift and Man lift key stays in the pushers house and you have to get a permit and do an inspection before you get the key every time you use it. All those rules and not only does it not help but the productivity goes way down. I think they have found a loop hole to make more money. If they can create a safety rules that slows down the process by 30 minutes per day, they can easily add a day to a well which creates an extra day of income on the well.

 

[f1tiger]

Years ago before there was a lake fork (best bass lake in Texas, well maybe after big Sam Rayburn) drilling directional wells where the lake is now was a chore, the Smackover formation in that area was second to none in Texas for H2S concentration except for around Streetman Texas ( Richland Chambers Res.) Those two areas were known for H2S, (20-30 percent,thank God they were tight formations and had to be fracked ( that is when Mr. Mitchell invented fracking ...In Saudi Arabia is where you can see high concentration of H2S 30-40 per cent along with high flow rates and high pressures , 25,000 barrels a day 60 million cubic feet of gas and shut in pressures in 10000 psi range, now that will get your heart pumping when you are the only Texan there and only maybe 3 white eyes on location, now it really getting interesting as we are about to drill into what the geologists say is hopefully the biggest discovery yet, and shoot there is a commotion of some sort at the rig entrance, we have the Saudi army at the entrance with machine guns to protect us ( they say) 20' sand burms and razor wire around the entire location...... H2S knows no race color or creed , I am thankful and glad those days are over ....getting old has some merit

 

[ohiosteve]

Dang F1 that sounds about as stressful as it gets! I'm guessing you were pulling down a pretty hefty hourly rate though?

 

[Craig Miller]

Years ago before there was a lake fork (best bass lake in Texas, well maybe after big Sam Rayburn) drilling directional wells where the lake is now was a chore, the Smackover formation in that area was second to none in Texas for H2S concentration except for around Streetman Texas ( Richland Chambers Res.) Those two areas were known for H2S, (20-30 percent,thank God they were tight formations and had to be fracked ( that is when Mr. Mitchell invented fracking ...In Saudi Arabia is where you can see high concentration of H2S 30-40 per cent along with high flow rates and high pressures , 25,000 barrels a day 60 million cubic feet of gas and shut in pressures in 10000 psi range, now that will get your heart pumping when you are the only Texan there and only maybe 3 white eyes on location, now it really getting interesting as we are about to drill into what the geologists say is hopefully the biggest discovery yet, and shoot there is a commotion of some sort at the rig entrance, we have the Saudi army at the entrance with machine guns to protect us ( they say) 20' sand burms and razor wire around the entire location...... H2S knows no race color or creed , I am thankful and glad those days are over ....getting old has some merit

Not interested...I like keeping my feet on American soil anyways. You get ya a good amount of h2s and that army's gonna leave you. Sounds like a death trap anyways with the 20 burms around. How do you disperse it?

 

[Brute 23]

Years ago before there was a lake fork (best bass lake in Texas, well maybe after big Sam Rayburn) drilling directional wells where the lake is now was a chore, the Smackover formation in that area was second to none in Texas for H2S concentration except for around Streetman Texas ( Richland Chambers Res.) Those two areas were known for H2S, (20-30 percent,thank God they were tight formations and had to be fracked ( that is when Mr. Mitchell invented fracking ...In Saudi Arabia is where you can see high concentration of H2S 30-40 per cent along with high flow rates and high pressures , 25,000 barrels a day 60 million cubic feet of gas and shut in pressures in 10000 psi range, now that will get your heart pumping when you are the only Texan there and only maybe 3 white eyes on location, now it really getting interesting as we are about to drill into what the geologists say is hopefully the biggest discovery yet, and shoot there is a commotion of some sort at the rig entrance, we have the Saudi army at the entrance with machine guns to protect us ( they say) 20' sand burms and razor wire around the entire location...... H2S knows no race color or creed , I am thankful and glad those days are over ....getting old has some merit

Not interested...I like keeping my feet on American soil anyways. You get ya a good amount of h2s and that army's gonna leave you. Sounds like a death trap anyways with the 20 burms around. How do you disperse it?

I agree... :nod: ... but thank you F1 for taking one for the team! :tiphat:

 

[TCRanch]

Little update: Pumper & crew were out yesterday to fix the electrical line that was actually under water. They never buried it (too much rock), just laid it along the fence line. So now they have it elevated & secured. Even the Foreman was out today and the oil/water has been pumped again from the well with the leak, they're working on that well right now and are going to remove/replace the contaminated soil and re-build the berm. Now all we need is for them to finally put in the roads and clean up the pastures but we're making progress!

Thanks again for all your input! I believe the phrase "surely this doesn't meet minimum EPA standards - we know some people" was definitely more of an incentive than the hefty refund they received from the county

 

[Bright Raven]

Little update: Pumper & crew were out yesterday to fix the electrical line that was actually under water. They never buried it (too much rock), just laid it along the fence line. So now they have it elevated & secured. Even the Foreman was out today and the oil/water has been pumped again from the well with the leak, they're working on that well right now and are going to remove/replace the contaminated soil and re-build the berm. Now all we need is for them to finally put in the roads and clean up the pastures but we're making progress!

Thanks again for all your input! I believe the phrase "surely this doesn't meet minimum EPA standards - we know some people" was definitely more of an incentive than the hefty refund they received from the county

That is great. Glad they see the light. Lol

 

[Craig Miller]

Little update: Pumper & crew were out yesterday to fix the electrical line that was actually under water. They never buried it (too much rock), just laid it along the fence line. So now they have it elevated & secured. Even the Foreman was out today and the oil/water has been pumped again from the well with the leak, they're working on that well right now and are going to remove/replace the contaminated soil and re-build the berm. Now all we need is for them to finally put in the roads and clean up the pastures but we're making progress!

Thanks again for all your input! I believe the phrase "surely this doesn't meet minimum EPA standards - we know some people" was definitely more of an incentive than the hefty refund they received from the county

Glad to hear it. See about those buckets Brute mentioned too.

 

[Bright Raven]

Little update: Pumper & crew were out yesterday to fix the electrical line that was actually under water. They never buried it (too much rock), just laid it along the fence line. So now they have it elevated & secured. Even the Foreman was out today and the oil/water has been pumped again from the well with the leak, they're working on that well right now and are going to remove/replace the contaminated soil and re-build the berm. Now all we need is for them to finally put in the roads and clean up the pastures but we're making progress!

Thanks again for all your input! I believe the phrase "surely this doesn't meet minimum EPA standards - we know some people" was definitely more of an incentive than the hefty refund they received from the county

Glad to hear it. See about those buckets Brute mentioned too.

Yes. And Brute also made a good suggestion on conducting surveillance with trail cameras. Regulatory agencies do it almost everywhere.

 

[Brute 23]

Glad they are cooperating. It's a lot easier that way.

 

[TCRanch]

I'll have to ask about the buckets. From what I understand, hardware wasn't replaced or installed correctly last Oct when a crew was working on the well (literally during a tornado that took our our barnyard - mental pygmies took picks from the rig!) and has been fixed.

We've been considering trail cams in the pastures, primarily because one of the gates in another pasture is never the same as we left it - and nobody has any business going in there - but also because we've had miscellaneous items suddenly come up missing. Items of relatively no real value. On the one hand, if they need it that badly then I'll look the other way. On the other hand, NO!

 

[Craig Miller]

We've been considering trail cams in the pastures, primarily because one of the gates in another pasture is never the same as we left it - and nobody has any business going in there -

I know how I wrap the chain, how my oldest son wraps the chain, how my dad wraps the chain...finally just put a combination lock on it.