ferndaleflyer wrote:
I have several oil and gas leases. Explain to me why my oil production check for 3 wells went down $160 last check while the pump price is going up way faster than it should. Somewhere down the line someone is making a killing.
probably depends on where the wells are and if flow is changing. On our wells in the Bakken field in ND royalty checks compare to a year ago are up by 16x. But that 16x increase is actually about double what it was when oil as in the $80 range, when oil tanked they basically barely pumped, since extraction costs were more than oil was selling for. Just pumped enough to keep the lease active.
Reality is that no much how we all would like rock bottom oil prices, New production areas in the U.S. have much higher extraction costs that older wells and many other international sources. And fracking wells drop of quickly, so wildly fluctuating oil prices aren't good, nor are big drops in oil prices.
