Fuzzy math, mistake or something else???

Started January 10, 2018 at 03:40 pm by @Frank Jones in General Shale

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Frank Jones
01/10/18 03:40:20PM

The Chief energy is the operator of the Kaufmann well in Bradford county, PA.  It was originally 615+ acres.  and without mentioning their names, the breakdown of the "Working Interest" for the four gas co's was 33.75%,  33.75%,  16.25% and 16.25%.  A few months ago, the Kaufmann unit was split up into East and West units (388+ and 278+ acres). 

I have property in the East unit and the gas company has informed me that their working interest is 17.77....% (was 33.75%) and my Decimal Interest reduced.  I've been informed by a neighbor that several others in this unit have similar problems.

I would think that the total "working interest" should equal 100% and if one company reduces their working interest, one or more of the remaining companies have to increase theirs.  Am I wrong in this theory?

I'm still waiting for a reply from the well operator and the one gas company.  So far, the other three companies have not made changes.

Any input from someone more knowledgeable than me would be appreciated. 

Frank J

Frank Jones
01/23/18 10:53:05PM @frank-jones:

The assumption that total working interest must equal 100% is correct.  Chief Energy has given me a list of the Working Interest owners and it appears that the number of WI owners has changed from four to eight.  Adding their interest percentages results in 100%.  

Even though the acreage has been reduced their Working Interest was lower because the number of companies involved doubled.




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