Thinking about an Oil Derrick

Ted

Ted

The pilot formerly known as Twin Engine Ted
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We were driving the semi around the back roads in our area this weekend for fun, a lot of roads that I haven't driven down much before. Anyway, many of the roads are only a few miles due south of my house, and it amazed me how many oil derricks there were out there, which got me wondering if there's oil or gas on my property.

I have no idea how finding any of this out or setting it up works, or how much money a small derrick can generate. Any oil barons who can enlighten me?
 
Ted DuPuis said:
We were driving the semi around the back roads in our area this weekend for fun, a lot of roads that I haven't driven down much before. Anyway, many of the roads are only a few miles due south of my house, and it amazed me how many oil derricks there were out there, which got me wondering if there's oil or gas on my property.

I have no idea how finding any of this out or setting it up works, or how much money a small derrick can generate. Any oil barons who can enlighten me?
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Those derricks a few miles south of you are probably already sucking up the oil under you.
 
Do you have mineral rights? If so, and if a geologist thought there was a formation worth tapping, you'd probably already have offers from guys that chase oil and gas for a living.
 
I would see if you have subsurface rights before opening that can o worms. I have a friend that moved, after drilling rigs surrounded his house with noise, dust, traffic, light pollution at all hours (and he never made a dime off the crude because he did not own subsurface rights).
 
luvflyin said:
Those derricks a few miles south of you are probably already sucking up the oil under you.
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That had crossed my mind for sure.

Stewartb said:
Do you have mineral rights? If so, and if a geologist thought there was a formation worth tapping, you'd probably already have offers from guys that chase oil and gas for a living.
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Let'sgoflying! said:
I would see if you have subsurface rights before opening that can o worms. I have a friend that moved, after drilling rigs surrounded his house with noise, dust, traffic, light pollution at all hours (and he never made a dime off the crude because he did not own subsurface rights).
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No idea how the mineral rights aspects work in that regard. We do own the land, which I thought meant we owned what was under it, but I could be naive in that regard.
 
Ted DuPuis said:
We do own the land, which I thought meant we owned what was under it, but I could be naive in that regard.
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At least in Texas, often the two are separated. I own ss right on some of my land but not the other. It should be listed in....your title/deed (I forget the correct document) - and ours is filed at the county clerk's office.
 
Kansas right? The KGS (Kansas geological survey) has pretty good online data. I'm thinking you are a bit far north but I've never worked eastern Kansas.

If you are serious let me know section, township and range and I can see what's around you.
 
When someon drills wells and pump oil, the adjacent landowners have to do the same if they want to get "their share" of the oil because they are all pumping from the same reservoir (pretty much, some exceptions). And yes, mineral rights can be owned seperately from land ownership. You have to research your deed. Talk to the county recorder or an appraiser or title company. And expect conflicts of interest. REally best to do YOUR own research. Oil companies tend to obfucaste and confuse neophytes. Be careful.

AS for how much a well can generate, that is from 1 barrel a day to 50,000 barrels a day. Varies greatly.
 
Clark1961 said:
Kansas right? The KGS (Kansas geological survey) has pretty good online data. I'm thinking you are a bit far north but I've never worked eastern Kansas.

If you are serious let me know section, township and range and I can see what's around you.
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I know they get oil from SE Nebraska since I've seen the wells operating. My understanding is it is fairly spotty, but I really don't know for sure.

As others have stated, mineral & subsurface rights aren't the same as owning the land.
 
Right now is a bad time to get in to it with the current price of crude. I unfortunately have a nice little tax writeoff because of it.
 
Here in oil and gas country, mineral rights are almost never sold with the land. Pretty much everybody is smart enough to retain the mineral rights for themselves or keep them in the family should someone decide to drill in the future. I have no idea how it works in your part of the world.

As for whether you could make money with a small derrick, it depends on how deep the oil and/or gas is. Around here, most of the shallow stuff is gone. In the old days, there were wells just a few hundred feet deep that could be reached with a small rig, and then produced using small pumps. Nowadays you need to be able to drill to 6000'+, and that takes a pretty good sized rig and probably around $1 million, plus all the surface equipment needed to produce it to the surface. You'd need to do some study of the geology of the area and see where the oil and gas is, then see what kind of equipment you'll need to get there.

My uncle drilled well to about 2000' with an old truck mounted Franks 35' derrick. So if the oil is shallow enough, you can get to it fairly cheaply. It sure isn't something you want to get into willy-nilly though.
 
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coloradobluesky said:
AS for how much a well can generate, that is from 1 barrel a day to 50,000 barrels a day. Varies greatly.
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If your site could potentially produce 50,000 bbl/d TRUST ME you would see derricks all around you.

But yes, it is worth a trip to the County Recorder's office. Bring the nice gentlemen and/or ladies there a box of doughnuts. -Skip
 
Oil is nice to have, but my name is not Derrick......:lol:

The area I live in, the railroads bought up all the mineral rights for miles on both sides of the tracks, back when land sold for a few cents an acre.
 
Zeldman said:
Oil is nice to have, but my name is not Derrick......:lol:

The area I live in, the railroads bought up all the mineral rights for miles on both sides of the tracks, back when land sold for a few cents an acre.
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Actually they were granted all rights for every other section for 20 miles on either side of the rail line as compensation for building the railroad. They were free to buy more of course if the Feds ever sold the land.
 
latest
 
Ted you're giving me nightmares of when I used to do royalty checks in California. Got a few good stories from that job.
 
In 1890, my great grandfather sold several thousand acres in Texas and retained 1/2 of the mineral rights. When he died, he left those rights to his 4 children. One of those was my grandfather, who left HIS rights to his 6 children. One of those was my Father, who left his rights to me and my two brothers. Therefore, I am heir to 1/2 of 1/4 of 1/6 of 1/3 of the mineral rights to the whole vast wasteland. Up until about the time the last recession started, I was raking in almost $160/month in royalties. But since then, the prices have dropped and my last check for $101 was around 4 months ago. I should get another one around $100 in a few months. (I think $100 is the minimum they send out at a time). Not enough to retire on, but it does (did) buy a good meal out once in a while.
 
When I first saw the "Driving a semi tractor for fun" thread, I thought wow, that is some serious next level s***.

Then Ted posts this thread. :p
 
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Royalties are typically 12% (they are supposed to be 15% but they ding you for some other stuff usually).
So 1/2*1/4*1/6*1/3 is 1/144th. So $100 * 144 is 14400. 14400/.12 is $120,000 gross a month. At 50 per barrel that is 2400 barrels a month or 80 barrels a day. Some or all of it could be natural gas or course. And could be more than one well.
 
coloradobluesky said:
Royalties are typically 12% (they are supposed to be 15% but they ding you for some other stuff usually).
So 1/2*1/4*1/6*1/3 is 1/144th. So $100 * 144 is 14400. 14400/.12 is $120,000 gross a month. At 50 per barrel that is 2400 barrels a month or 80 barrels a day. Some or all of it could be natural gas or course. And could be more than one well.
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It's mostly coal, but a small percentage is natural gas. But I understand the proportions are changing. And it is multiple sites. I get a statement with every check, but I have never tried to figure out what all it is saying. I just look at the amount of the check.
 
Ted's progression:

Thinking about a:
  1. Boat
  2. Tractor
  3. Semi-tractor
  4. Oil derrick
  5. ???
 
Yeah, I assumed he meant pump jack instead of oil derrick/drilling platform.

Pump Jack
th


Oil Derrick/Drilling Rig
Upright_oil_derrick.JPG
 
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The primary thought here is that there are some not too far away, and if there's money to be made, it's worth considering. And I'm just curious not knowing how these things work. I flew a lot of pipeline/oil guys around in PA during that shale boom in the early part of this decade, but I never had any land that made me any money off of it. Plus I thought the pump jacks (thanks @SoonerAviator for the education on the terminology) look cool.
 
Bill Jennings said:
Ted's progression:

Thinking about a:
  1. Boat
  2. Tractor
  3. Semi-tractor
  4. Oil derrick
  5. ???
Click to expand...

At this point I make these posts in part for the amusement factor for all involved, plus the education. As you know, PoA is my go-to spot for information on, well, all sorts of things. :)

Difference is that I've actually bought 1-3. #4 I doubt will happen unless it actually makes sense. I am also questioning how long I will keep this semi for, whereas the boats and tractors have been longer term deals. We have 4 tractors now, one of which is torn apart to rebuild the engine on. The other 3 work very well.
 
bradg33 said:
latest
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Posted as a joke but it is actually done this way in some places of the world. Canada has one of the larger fields I know of that was drilled and produced this way. The derricks didn't quite look that way (they were actually masts) but they were tilted like the one in the cartoon.
 
coloradobluesky said:
Royalties are typically 12% (they are supposed to be 15% but they ding you for some other stuff usually).
So 1/2*1/4*1/6*1/3 is 1/144th. So $100 * 144 is 14400. 14400/.12 is $120,000 gross a month. At 50 per barrel that is 2400 barrels a month or 80 barrels a day. Some or all of it could be natural gas or course. And could be more than one well.
Click to expand...

You're kicking in my PTSD from working filing Lease-Purchase Agreements into filing cabinets when they were all typed on an IBM Selectric typewriter by someone in the "steno pool" and then sent to "data punch" to be shoved into the mainframe... at an oil company that had a big red star for their logo... so much paper... so many fractions... so many names of people with interests in each well... and a copy and a folder for every one of them... to back up the mainframe...

Lordy I was glad to get out of doing that and get pestered to use "that new Ami Pro Spreadsheet thing on the PC" to make up a 3D spreadsheet to schedule tankers into the west coast instead...

PAPER!!! SOOO MUCH PAPER!!!!!

And then there were the gauger's run tickets... there wasn't a table in the entire office that wasn't covered in banker's boxes full of those things once a month.

AIEEEEEEEEEEEEEEE! Run away, run away!

But damnit... we were going to follow Demming's lead and win that Malcolm (effing) Baldrige award with our "Total Quality Management"... LOL... at least a meeting a week on our progress on that crap.
 
Clark1961 said:
Posted as a joke but it is actually done this way in some places of the world. Canada has one of the larger fields I know of that was drilled and produced this way. The derricks didn't quite look that way (they were actually masts) but they were tilted like the one in the cartoon.
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Not surprising, I could see how sometimes that might make sense. Some of the pipeline guys I flew around were horizontal drillers since you couldn't always just dig up the ground and put a pipeline through it.
 
ChemGuy said:
#5 is Llamas or Alpaca's.

Lots of money in Alpaca's.
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Horses are more likely, although we've also considered other animals. Problem with a horse is that we'd have to build a barn and buy a horse trailer.

Although I have been looking for something to tow with the semi...
 
Ted DuPuis said:
Horses are more likely, although we've also considered other animals. Problem with a horse is that we'd have to build a barn and buy a horse trailer.

Although I have been looking for something to tow with the semi...
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Beware! I once had a conversation with someone on "things you should do once in your life (and he had)". He mentioned this list: Own a convertible, own a horse, own an airplane. At which point he turned to me and said "Horses are expensive!" So apparently horses are expensive to someone who owned an airplane. Beware I say!
 
Ted DuPuis said:
Horses are more likely, although we've also considered other animals. Problem with a horse is that we'd have to build a barn and buy a horse trailer.

Although I have been looking for something to tow with the semi...
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Other acceptable animals for your consideration:
p03dtkqg.jpg


When I used the term "animals" I really meant multiple hippos. There are no other acceptable types of animals.
 
bradg33 said:
Other acceptable animals for your consideration:
p03dtkqg.jpg


When I used the term "animals" I really meant multiple hippos. There are no other acceptable types of animals.
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You're welcome.
 
jsstevens said:
Beware! I once had a conversation with someone on "things you should do once in your life (and he had)". He mentioned this list: Own a convertible, own a horse, own an airplane. At which point he turned to me and said "Horses are expensive!" So apparently horses are expensive to someone who owned an airplane. Beware I say!
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I've had similar conversations as well. As someone who's been financially responsible for (or otherwise been involved in the costs associated with) a multitude of piston twins over close to a decade, that's frightening!

bradg33 said:
Other acceptable animals for your consideration:
p03dtkqg.jpg


When I used the term "animals" I really meant multiple hippos. There are no other acceptable types of animals.
Click to expand...

Somewhere there's a picture I took about 15 feet from a momma hippo making about that same facial expression at me in South Africa, would've been 19 years ago this summer. No fences, not that they would've done much good.
 
jsstevens said:
Beware! I once had a conversation with someone on "things you should do once in your life (and he had)". He mentioned this list: Own a convertible, own a horse, own an airplane. At which point he turned to me and said "Horses are expensive!" So apparently horses are expensive to someone who owned an airplane. Beware I say!
Click to expand...

The neighbors who own them call them "hay burners", and say compared to their sheep, alpacas, whatever... they're generally useless and eat more than anything else. :)
 
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