Oil in the tank...no royalties EVER

I have wondered why we have never been told there is oil in our brine tanks.

We do have an 'Oil and Gas' lease stating we are to be paid on all oil and gas extracted.

I found this oil when I went up the stairs and opened the lids on these tanks.

We are in Mon county, WV.

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Permalink Reply by brat on April 2, 2013 at 4:36am

JK, Yes, I too see an oil surface about a 1/4 down on my OIL tank...been there for YEARS!  What I don't know is how much water is under that oil surface....since oil floats, could be mostly water.  There is a chemical stick or something that is used to measure the water amount I believe.

Permalink Reply by JK on April 2, 2013 at 5:04am

We know that chk has been hauling it out for years.

We are getting it tested this week by a professional lab.

Permalink Reply by JK on April 4, 2013 at 11:40am

Tad,

Today I had a professional lab come and get samples to be tested to see just what the heck we do have in oil.

I willl know in 2 -4 weeks. It's going to interesting.

I was shocked to see how much was in the tank today.

About a month ago I collected some and it was a solid half inch.

Today it was 3-4+". Big difference in one month I'd say.

Permalink Reply by brat on April 4, 2013 at 11:54am

I just read the Ohio Well Completions report for my well....drilled in 1985.  The company apparently submitted to the state, that  since going on line,  only  5 different years was oil  sold (the well produces mostly gas).  I only remember ever getting one check that included an oil sale (most checks were for gas production.)  So now how do I prove that the company paid me for the oil?

Permalink Reply by JK on April 4, 2013 at 12:04pm

Your statements.

Sounds like they were stealing from you too.., oil is oil no matter the quantity.

It still gets taken out to somewhere.

You can go to the USGS and they have all the records and logs.

It's worth it to see.

You may be part of something you are not aware of.

Permalink Reply by SA Frank on April 2, 2013 at 5:10am

You will have some oil mixed with the brine.  I have heard that companies that inject the brine back into the ground will often try to skim the oil from the brine for some extra profit.  However for the oil companies, it isn't typically worth fooling with. 

Permalink Reply by JK on December 12, 2013 at 3:16pm

Update

The lab reports came back and the oil is better than Texas oil.

Pure enough like motor oil.

It's awful to get ripped off and we are.

 

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on December 13, 2013 at 4:02am

Before you go accusing anyone of ripping you off I'll point out what should be somewhat obvious: if there's oil in the tank then it hasn't been sold yet.  You don't get paid for what's extracted, you get paid for what's sold from the wellhead.  Once the company comes out and takes to oil to sale you should then get paid.  If you don't get paid at that point then yes, you're getting ripped off.

Permalink Reply by JK on December 13, 2013 at 4:25am

That's my point.

We have never been paid a dime for any of our oil that has been trucked off.

We even have a receipt of the trucker taking it and left it in the instrument panel.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on December 13, 2013 at 4:33am

Then call an attorney.  Compel the company to give you all the receipts for the well and prove to them that they have underpaid you.

Permalink Reply by pg guy on December 13, 2013 at 4:51am

In the Appalachian Basin it is not uncommon for royalties from older production to be paid by the refiner or first purchaser of the oil, not by the well operator.  It is also not uncommon for a property owner to fail to sign, or even to refuse to sign, the purchaser's division order or other documents, and thereby not get paid.  Before consulting an attorney, it may be worthwhile to at least make some contact with the company that operates the well(s), or the company with whom you signed the lease - possibly the same company.

If Chesapeake has been hauling, as you stated, then it is most likely brine that is being hauled away.  As far as I am aware, Chesapeake does not operate tankers equipped to safely and legally haul crude oil.  (Someone please reply and correct this comment if I am incorrect. Thanks)

 

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on December 13, 2013 at 7:05am

"As far as I am aware, Chesapeake does not operate tankers equipped to safely and legally haul crude oil. "

I imagine they farm that out, especially when we're talking about older conventional wells with lower volumes.  I know that if you sell oil from a well here in Mahoning County it was probably hauled away by (and the royalty check comes from) Ergon.  Don't know about the OP's neck of the woods, however.

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