Locator: 46828B.
Wow, wow, wow -- a reader whom we will call Tucker just noted a new well on his / her monthly production statement. Tucker has never paid much attention with his / her production statements but with a brand new well, Tucker thought it was a great time to see if I could help him / her with reading / making out the production statement. So, this weekend, I will post some YouTube videos explaining oil production statements.
This should be fun.
Okay, I've started taping the videos.
These videos are very amateurish.
I may have a lot of this wrong, and all of this information can be found on the web posted by much more knowledgeable folks and much more professionally. I often use terms incorrectly, and I often round numbers, so take all of this with a grain of salt. I'm simply trying to explain to a reader how to read his/her production statement.
I'm hoping to provide enough information -- right, wrong, whatever -- to get the reader started.
Feel free to fact-check and re-run the numbers.
Again, this is for one reader; it is not for the general audience. If in any way you think this might affect your own minerals, go to other sources for better and more accurate information.
I think Clip 1 is the worse; I may re-do it.
Clip 2 is of the well itself -- where it's located, etc.
Clip 3 is probably the one the reader is most interested in -- how to calculate the decimal unit and how the decimal unit is useful.
So, here goes.
Clip 1:Clip 2: There is an error in the spreadsheet that I produced for this video but that error has been corrected in the post and in clip 3 below. It does not matter with regard to what I was posting in Clip 2.
Clip 3: Note only major error in this clip. I stated that the 2560 acre drilling unit was two sections, one mile by two miles. In fact, a 2560-acre drilling unit is four sections, two miles by two miles or one mile by four miles -- both methods giving one four square miles of surface area and four square miles in the drilling unit.
Production statements (i.e. checks) can make for fascination reading. We have received statements totaling over 128 pages. Some reversing and correcting items for over five years! Often, the net change is under several hundred dollars. Can't imagine the cost if all lessors demanded paper reports.
ReplyDeleteYes, I think this will be quite a hoot. I will post the YouTube videos so that others can tell me where I'm wrong. I've had no formal training in these reports; superficially, if one reads them carefully, they look pretty straightforward, but my hunch: lots of "hidden" stuff of which I know nothing.
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