Sudden reduction in royalty check

My recent royalty check was a fraction of the one before.I called Gulfport to see why.I was told that the drop in oil prices was part of the reason but the main reason was due to a well just west of me started production.That well, most likely, took some of the pressure from the well in my block,there by reducing production in my well. He  said it should recover over time. Does this sound right? Any experts on here that can give input?

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Permalink Reply by Frank Walker on May 22, 2015 at 12:53am

I think it is possible commencement of production in a nearby well, or unit, could impact production of your well.  Why production in your well would recover over time is not clear to me.

Permalink Reply by robert c miller on May 22, 2015 at 1:06am

 He said the pressure should equal out eventually. Unclear to me as well.

Mike MurphyPermalink Reply by Mike Murphy on May 22, 2015 at 1:36am

my question is did your production jump up right after  they fracked the other well  .......that would tell me the two fracs overlaped each other ......but i still dont see how your well will come back to what it was 

 also was your well online for the whole month or was it shutin part of the month  I would think the new well would not lower the pressure on your well .....it should have higher pressure on initial start up of production  then your older well  that has been producing for a longer time .....unless the sales line pressure was higher and your well didnt have enough pressure to put production into it  as far as pressure equaling out this could be what he means ....the sales line pressure will equal out in time and your well will be able to put production in it raising your royalty check back up 

Permalink Reply by Frank Walker on May 22, 2015 at 1:49am

"Crosstalk" between wells, and between units, has been of interest to me for years.  The gas companies do not like to discuss this topic because there is not much they can do about it, and because landowners are justified in their concern others might be paid for their gas.  Also in fairness, because "crosstalk" is a function of local geology, it is highly variable and not easily quantitatively predictable.

Finally, greater separation (of laterals) works to minimize "crosstalk".  But reduced separation operates to enhance recovery, a desirable outcome from the viewpoint of the gas companies.  

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on May 22, 2015 at 3:23pm

Robert,

     You can compare your royalty statement production against the ODNR Quarterly production figures, assuming you are in Ohio to see if your production actually dropped off.

You know what to do if your royalty statement production is significantly less than the ODNR figures.

1) Educate the people you know on the well that your producer is following the lead of the other unethical O&G companies.

2) Notify the state & Federal Government Departments so the news media will have the option to report your story to the nation, but probably won't.

3) Notify the President that your producer is not paying a fair Royalty to Appalachia Counties in Ohio.

4) Contact the Federal Attorney General.

5) Seek legal help per your lease.

Permalink Reply by craig on May 22, 2015 at 3:38pm

Another scenario of why this is happening might be that the amount they have contracted for delivery  isn't large enough to  accommodate both well's production along with all the other wells they have online. 

Of course  the person at Gulfport that you talked to, or emailed, may not have had any idea why your particular well was doing this and are just spouting off the generic responses.

Permalink Reply by robert c miller on May 22, 2015 at 4:22pm

The individual I talked to from Gulfport was Zach McCoy.He is supposedly over this particular area. He has always been very helpful.

Permalink Reply by Flowerchild on May 22, 2015 at 11:49pm
We had that happen and when I called chk I was told they shut some of the wells down part of the month due to fracking near by.
Permalink Reply by robert c miller on May 23, 2015 at 12:35am

I hope that is the reason.

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