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Oil/Gas/Question on Proceeds from well


production 2014
production 2014  

earlier production
earlier production  
Hello we just executed on a judgment we obtained against an oil and gas company taking over a well in Alabama and the operator has been kind enough to hold all of the proceeds for FY 2014 until the case is resolved.  We will be able to collect in about 6 weeks and I have no idea how to determine how much money is there or how much will be in the future.  It is a 7 figure judgment any help would be greatly appreciated.

First off I would suggest you buy my book fundamentals of investing in oil and gas as I think it would help you out greatly.

I try to separate myself from situations that involve 2 locations that are separated by large distances.  E.G. your message was from Wisconsin and the assets appear to be in Alabama along with the fact that there was a judgment or dispute already tells me it is or has been a cluster f!@!.

I have reviewed your documents and see in the last 3 years you do have an asset that is producing fairly consistent but you are producing water.  Your production is also dropping and without being in the field to try and assess the situation more or look into any type of operating records of the well, I come to a very rough conclusion that your well is in the decline and has produced a good size of water over time. I do not know what kind of equipment but I assume there is a tank to told this water, that tank has value and it would be important to tell anyone you talk to in the future the size as it is important for ongoing production/sale/disposal, also what kind of material is this tank made of is important too.  There is also an issue of what is being done with the water (injection or hulled off) as there is a cost to wells producing water. sitting here I can not get a good assessment of the water situation.

This is my personal feeling of the situation and by all means not a professional one at this time as I have not had enough time to really get into it.

At this time I feel you have a well that is consistent but from the surface I can not see any operating costs. Gas wells typically do not have that much overhead but it still is a important thing to take into consideration in moving forward.

As for what is there.  I have made a chart of your production. additional data and analysis would or should take place to complie an accurate depletion curve, that is if the operator has not altered the production with a choke or stimulation. see image.  This picture shows your production and if everything is the same someone might see this is a way to see what future production could be.  The problem is that you also have to take into consideration the market for gas.  If you were looking to sell you would have to have all your documents in order.  all your contracts, recorded records, API#s of the well(s) and the exact location of the well (county/state), list of costs, what is plugging cost in your area, and what ever else you can think of that would help in assessing the situation.

I am also a little concerned with the operator in place but since I do not know him/her I can not make any judgments but it is something that has to be addressed if you were to sell.

by all means this is not a professional opinion of any kind and should not be used as such in the future.

I might be interested in your well(s) but would need all the information that I listed above.  If you wish to continue discussions feel free to email me directly at

Chris Termeer


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Chris Termeer


I can answer a broad variety of questions about oil and gas in the upstream, midstream, and downstream sectors of the industry. Topics of knowledge include but are not limited to: * History of the industry * Basic questions about formation of hydrocarbons (hydrocarbon window, geologic processes that create oil and gas formations) * Types of formation structures, source rocks, and traps * Surrounding production analysis (how to, importance of etc) * Basic questions about magnetic surveys, geometric surveys, seismic surveys (2D and 3D) and radiometric surveys. (Including relative strengths and weaknesses and how performed.) * Basic questions of cable tool drilling * Complex questions about rotary drilling, its components, operations, how to set up a rig. Drilling operations including fluid/mud, cuttings analysis, downhole testing, directional drilling, making and tripping pipe, cementing casing (importance of and how performed etc), common drilling mistakes and problems. * Complex questions about post- (though sometimes occurs during) drilling activities such as well logging, sidewall and whole core sampling, drill stem testing, reserves analysis and projections. * Basic questions about well completions including installation of surface wellhead and subsurface safety valve, well perforations, lateral and horizontal completions, hydraulic fracturing, (I prefer the spelling form "fracking" for the active verb and "frac" for the noun form) and wellbore swabbing. * Basic questions about so-called "flush production" (others call primary recovery) such as natural gas drive, water drive, compaction drive and gravity/dip drive. * Complex questions about artifical hydrocarbon lift technologies such as the sucker rod pumpjack, plunger lift pumps, gas lift pumps and electric subsersible pumps. * Basic questions about secondary and tertiary recovery techniques including water flooding, gas injection (be it CO2 or N), anaerobic recovery and so forth.


I have worked in this industry for many years and have at least some experience in all aspects of it. My specialty in recent years has been in upstream exploration and production. I have worked as a Consultant and general partner for a variety of projects in Texas, Illinois, Louisiana, Colorado. My experience is also built on my extensive writing in the oil and gas industry on a series of blogs and websites and my recently published book, Fundamentals of Investing in Oil and Gas.

Owner,, Owner,, Owner,

Self-published author of Fundamentals of Investing in Oil and Gas, (ISBN: 978-0-9890434-1-0 and Library of Congress Control Number: 2013906080) Contributing author on

Bachelor's of Science from Michigan State University with a variety of other coursework at other Universities including the University of South Florida and University of Wollongong.

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