Gas/oil

Discussion in 'Homesteading Questions' started by Rita, Nov 7, 2004.

  1. Rita

    Rita Well-Known Member Supporter

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    Has anyone had any experience with gas/oil exploration on their property? Was it a good or bad experience and what would you do differently had you known before hand? If you actually had a well for oil put in was it a big noisy mess? Thanks, Rita in TN
     
  2. OD

    OD Well-Known Member

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    When I was a child, they drilled one just across the fence from our house, on the neighbor's property. It was noisey & stinky, but didn't last very long. They struck natural gas instead of oil, so they capped the well off, cleaned up their mess & left. The property owners were left with a nice water well & a big pond.
    We were sorry they didn't strike oil because we would have gotten royalty from the well, too.
     

  3. horselogger

    horselogger Well-Known Member

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    keswindhunter has quite a few on her ranch.....she won't be on the net for awhile,but she shoud be willing to respond if you emailed her.Lee
     
  4. Windy in Kansas

    Windy in Kansas In Remembrance

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    In 1974 I purchased some land from a cousin that had a stripper oil well on it. The production was indeed classified as a stripper well and produded about ten royalty checks per year. The well had been in production for more than a decade at the time of purchase

    In just a couple of years they drilled another well on the same quarter section. Oil in paying quantities was struck, again a stripper well was set into motion.

    A couple of more years down the road another oil company leased mineral rights, drilled and declared the well a dry hole. The kicker was that there was good indication this site would produce a good stripper well. However the company was new to the state and stripper production was not what they would settle for, hence dry hole.

    A couple of years later another company procurred rights to this site. The attempted to redrill the original site, however their hole stabilization mud was not of the right consistency and the hole collapsed locking in more than 1,000 feet of drillstem. After days of working to free the drillstem to no avail, a larger rig was brought in to "wash over" the drill stem that was stuck and to free it. Oops, still no luck and they too lost drillstem.

    Finally a percussion charge was lower in the hole and the drillstem blown in to so that as much could be recovered as possible. The hole remains with over 1,000 feet of drillstem in it.

    Still another couple of years later this site was offset to the north. This time no sign of oil in paying quantities.

    Bottom line, the first well finally exhausted all easily available oil and the well was plugged.
    The second well fell off in production which is normal for the strata they were producing from. I sighed the royalty rights I owned over to my daughter in college so that she would have some spending money. Now some 12 years later and after being worker over the well is once again producing about $80 per month for her share of royalty.

    I've written all so that you can see how the hope of oil can bring highs and lows in your spirits.

    Indeed the drilling process can produce a mess. Pits must be dug for the various drilling muds and the slush. Rarely does rain and mud stop a rig from being brought into the site. Cats will hook to trucks and drag them in. Sometimes they will just doze off the surface until the trucks can come in on dry ground. I've see mud/dirt banks 6 feet tall at times.
    More rain means more scrapped down or trucks being drug in. Water is required for drilling, so water trucks deliver day and night if water cannot be pumped from nearby.

    While farm field drilling sites can be rejuvenated fairly quickly, those sites in pastures frequently leave the land very rough and nearly impossible to smooth because of the grass clumps. Often because the grass has been disturbed weeds take ahold and grow.

    If a well is developed, a tank battery is set to hold the oil until it can be hauled out or measured and pumped into a pipeline.

    Often enough saltwater is produced along with the oil that it too much be hauled off or injected into another well. Somewhat frequently dry holes are used as injection wells, but royalty is paid for the injection allowance--in compliance with state or federal guidelines. Well at least they are supposed to be.

    A road into a producing well is needed so that the pumping unit can be checked and serviced daily. Such a road is not always in the best location to suit the land owner. Also the tank battery is not always in the best of locations, which are nearly always set near a public road. Often the roads have tank sludge spread on them so as to give the road some water repellancy and kind of act like a paved road for the pumper.

    The actual well drilling uses large diesel engines that are muffled, but still produce a lot of noise, i.e. it is difficult to shout back and forth at the actual rig site. Even a mile away or so has noise as the drillstem reaches deep into the earth and produces a sort of droning noise. Some people are more sensitive to this low frequeny noise than others. Currently I am hearing a near constant drone as a salt mine shaft is drilled for museum access. The site is several miles away from my home, but I certainly still hear it.

    Oil wells were drilled on my parents land at least six seperate times. All dry holes except one. It produced one tank of oil before going dry. Apparently a pocket of oil was all that was produced or trapped in this location. Again, lots of high hopes for some wealth or easy income, also the heartbreak from not getting it. Of course the land is supposedly restored to predrilling conditions, and there are also checks issued for "damages", i.e. damage crops, damaged pasture, etc.

    I currently have a quarter section leased to an oil company. I received $10 per acre for a three year lease. This is standard in our area. I have also been asked to allow in seismic
    exploration to the tune of $800, or $5 per acre for the quarter section. This will go to the cash rent tenant however since it is for damages to the land and crops.

    My hometown of Utica, Kansas has several oilwells within the city limits. Too bad they weren't drilled when I still owned property there.

    The pumping units near a town or house most generally have electric motors to provide the power to keep the constant noise to a minimum. Wells in the country most generally have gas or diesel engines on them. Where the pumprods enter the well head there is often a squeak between the surfaces. Not loud, but mildly annoying.

    Bottom line, if you get a decent well just use that money to move elsewhere away from the mess if you don't like it.

    What would I do differently? I always modify the oil royalty lease to allow excess gas to be used for all buildings and lighting. Standard Kansas leases provide for only some of this.
    Most don't have an excess of gas anyway in the part of the state I was in. Only a few provided enough gas for the pumping unit itself.

    Oh sometimes the oil company will hire you to be the pumper for the well, thus providing a little extra income.

    Any other questions? Ask away and I'll see if I can answer them.
     
  5. TXlightningbug

    TXlightningbug Well-Known Member

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    A friend of mine here in Texas owns land in Louisiana where they are pumping gas. In the last few years, her royalty checks have suddenly plummetted in amounts. The company says that the gas is failing. Locals in LA say that the companies in LA are going in on land that's absentee-owned like hers and are bypassing the meters to pump a lot of the gas out without it being measured on the meters which are used to figure out how much royalty to pay. They have even caught and prosecuted a few doing it. She doesn't have the money to hire the private eye to catch them at it and the only owner in the area who does have the money considers it a tax write-off so he won't.

    Personally, I wouldn't do it. But that's just me.

    TXlightningbug :yeeha:
     
  6. Oilpatch197

    Oilpatch197 Well-Known Member

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    typical wells around here are about 1500 ft deep, very shallow.

    and if they get a dry hole, you'll get $1,000 for damages.

    and somtimes Oil wells will ruin the Tap water supply, my grandpa has a water well that taste like the ocean, yuck!

    around here they use One-Lung gas motors on the well jacks, it is very nice, you can hear them off in the distance going, Put Put Put Put, chachacha, ...Put Put Put, cha cha cha

    and Yeah, somtimes when they don't have the excess gas hooked up to a Oil Flare, or the Flare goes out, it starts to STINK, but hey, as long as you get your part, it's ok.

    the bad thing would be is if the company went belly up, and the assets of the field is autioned off to another company, and they let the lease get into a abandoned state, then you'll have alot of junk there, sitting for the next 50 years, until the State Plugging program comes and cleans it up.
     
  7. BCR

    BCR Well-Known Member

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    We don't own mineral rights here, so a well was drilled about 12 years ago for natural gas. It is loud and noisy for a time. They paid us for the inconvenience (so we could stay at a hotel, which we didn't do). They didn't live up to the promises of not taking down specific trees and replanting them. When they didn't replant the grass/grade properly, a call to the state and a quick trip by the inspector out here and that was taken care of. We got free gas that is supposed to be limited by an amount-but they didn't put a meter on our use, so its a moot point.

    I might have used a lawyer instead of the handshake on the trees. And probably asked for more cash as owners of the surface. We refused a permanent road to the site, you can too. They did re-gravel the drive (that equipment tears it up). I didn't want it done, but now that it is, free gas has really been great.

    Good luck.
     
  8. Rita

    Rita Well-Known Member Supporter

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    Thanks so much for all the info. As usual the Forum folks came thru to help us. After reading everything I think it has scared us off. We don't have a tremendous amount of land and it sounds like despite their promises it would be a mess for who knows how much income. If we get desperate at some later date we could pursue it. I wouldn't want our wonderful neighbors to come to hate us for the noise etc. Rita in TN
     
  9. Oilpatch197

    Oilpatch197 Well-Known Member

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    umm so Rita is somone wanting to drill?
     
  10. Windy in Kansas

    Windy in Kansas In Remembrance

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    The noise doesn't last very long if that is the swaying decision.
    In western Kansas a rig is typically running for 8 to 10 days to get to the projected depth.
    The worst noise is not really the steady drone during actual drilling, but when tests are taken or drillbits are changed out. The engines full throttle as the winch is used to pull pipe, slacked off as the joints are undone, then full throttle as the next joints are pulled into position. Since only two or three joints of drillstem can be removed at a time it takes some time.

    IF oil is hit, then a finishing rig is brought in to complete the well. Usually they are there just a few days and the noise is considerably less, mostly one engine and no steady drone.

    Except for the pumping unit the noise is basically over in a total of 21 days, usually split by a few days from the drilling to the completion tools.

    I agree with Oilpatch97 that the pumping unit engines, when one cylinder units, are more pleasant than annoying. Perhaps driving by some producing wells will give you an actual idea of what you are up against for noise.

    When I did own royalty and was receiving checks back in the 1970s, the two wells brought in about $300 per month. I co-owned the land with two other cousins, so had I owned the entire mineral rights I would have gotten about $900 per month. Kansas crude is not a high grade so that might mean more elsewhere, and remember that was back in the '70s.
     
  11. Oilpatch197

    Oilpatch197 Well-Known Member

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    but right now a barrel of crude will bring $50

    so a Typical Illinois basin well, the minium they produce is 1 barrel a day

    One barrel at 50

    10 days = $500

    30 days = $1500

    let's say you get 7% royalty= $105 per month.

    I dunno maybe my royalty percentage is too high...

    Let's say you get 4% you get $60 per month.(that sounds better)

    but many wells bring in more that one barrel a day.
     
  12. Rita

    Rita Well-Known Member Supporter

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    Oilpatch, with a name like that I guess you have some interest in oil. They are wanting to get a geologist in and check it out. There are no wells that we know of that we could find out how noisy they are. They say l/8 barrel oil and l/8 of ? for the gas. We have a gas pipeline bordering our property so they said that was an advantage. Rita
     
  13. Michael W. Smith

    Michael W. Smith Well-Known Member

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    In the last 5 years, we have 5 gas wells drilled on our property. We already own ourselves an old gas well that we were using for natural gas for the house, so getting natural gas wasn't an issue (provided our old well holds out).

    The company I was dealing with wanted to lease our land as they wanted to put a gas line over our property to be able to provide gas to an additional gas company - and they wanted our land BAD! Which put me in the drivers seat.

    Most leases state that the owner of the mineral rights will get 200,000 cubic feet of gas / year. They were happy to tell me while showing me the lease, that they would give me 300,000 cubic feet per year. Since I was in the drivers seat, I told them I wanted 300,000 cubic feet / well. They finally agreed on 300,000 for the first well, and an additional 200,000 / well. Since I have 5 wells that they have drilled, I am able to use 1,100,000 cubic feet per year. However they did stipulate that this gas is only for residential use and NOT business use (they got stung by somebody who did the same thing and then put up a greenhouse). I get 1/8 royalty check from all gas that is sold. Most gas wells around here, seem to provide $200.00 - $300.00 in royalty checks per month. Of course, as the gas supply is used over the years the checks will keep getting smaller and smaller, but a well should last for at least 50 years. Some good producing wells can produce over $1000.00 / month royalty checks but high producing wells are few and far between, and sometimes even a high producer becomes a low producer quickly as the gas is sucked down.

    The company that did this, worked with us, showing us where each well would go, where the access road would go, etc. Yes, drilling does make a mess, but drilling a gas well only actually takes about a week. Total tear-up time for a well site is at most 3 months.

    If we didn't sign up with this company, chances are, they would have leased all the property around us and went around us, while putting wells down close to our property line to suck our gas out anyway without letting us get a royalty check, so we went ahead and signed up.

    This is not to say they will definitely drill. Our first lease for 2 years never did get any drilling done. When this second company approached us, they guaranteed me a well would be drilled within 3 months of the signing of the lease, or it would be void. They lived up their word, like I said, they wanted our property!

    If you decide to have this done, make sure that anything you want done, or agree to is in writing on the lease! A handshake or verbal agreement is not good enough. You can go into your county courthouse and look up oil and gas leases in your area to make sure your lease is about the same. You might even find from other leases of items to add to your lease.

    Good luck and let us know. If you want more information from me, just PM me.
     
  14. comfortablynumb

    comfortablynumb Well-Known Member

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    here in western PA (the quaker state...oil lol) the woods are peppered with old oil rigs. I can walk you from my house to 5 of them, all sitting dormant with storetanks of greenoil full to the tops.

    greenoil is lovely stuff, good for fenceposts bottoms or polishing hardwood flooors.
    oh yeah it stinks too.

    all these damn wells around here the ground is soaked with oil for a half acre... old oil guys were pretty messy. I would assume they are cleaner today.

    a lot of these old wells are capped off and they tap gas from them to whoever owns the land... if there is enough to sell you got em going puht puhgt putt pugt all day.
    the one down the road they fire up for about a week every year and run it 24/4 then shut it down. i dunno whats going on there.
    land with a gas well would be cool... free fuel! green oil will burn in a waste oil furnace... but its kinda smelly.

    PA greenoil looks like... green paint. makes good wood preservitive. it must not be worth a whole lot or thosetanks wouldnt be left full?

    quaker state oil co has a lot of wells around here and they pump all day all night.... pretty quiet! electric motors.

    I would be more interested in the free gas than the royalty checks (unless they were really fat checks). free gas = free heat free power, convert all the farm engines to burn natural gas.... generators... the toys and fun justboggles my mind.
     
  15. Michael W. Smith

    Michael W. Smith Well-Known Member

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    Comfortablynumb wrote "I would be more interested in the free gas than the royalty checks (unless they were really fat checks). free gas = free heat free power, convert all the farm engines to burn natural gas. . . . generators . . . . the toy & fun just boggles my mind."

    Yeah, I certainly can't complain about the free gas. However, like I said, we had free gas before due to an old gas well being sucked down and not being profitable enough to the gas company. They sold it back to the owner of the land for $1.00 and so far there has been enough gas off that old well to heat our house for the past 40 years, plus it had enough gas to raise thousands of chicks when my wife's uncle had a chicken business. The royalty checks are really a bonus for us!

    I would like to convert our cars from gasoline into natural gas - I know that it can be done, but haven't been able to find the information on how to do it, or how much converting the cars plus setting up a "filling" station would cost. I would like to get a natural gas generator though for those winter storms when the power is out for days at a time!!!

    Our gas wells did produce oil shortly after they were drilled (an addition to the royalty check!), but that only lasted a few months. Very little oil down south of you! Brookville, Punsutawney area. Howdy neighbor!