Oil Lease Production Listings – Buy, Sell & Invest in Oil Assets

Evaluating Producing Wells Properties

Production History

When evaluating producing wells, it’s crucial to start with a review of the well’s production history. Analyze monthly or daily production rates for oil, gas, and water, and look for stable, declining, or erratic trends. Consistent production generally indicates well-managed operations, while significant declines or frequent shut-ins may signal reservoir or mechanical issues. Examine decline curves to estimate remaining reserves and future cash flow.

Operating Costs and Net Revenue

Assess the operating expenses associated with each well, including lease operating expenses (LOE), lifting costs, and any recurring maintenance or workover costs. Compare these costs against the revenue generated from the sale of hydrocarbons. High operating costs relative to production can significantly reduce the net revenue interest (NRI) and, ultimately, the property's overall profitability. Always verify the revenue division orders to ensure the correct distribution of income.

Reserve Assessment and Future Potential

Evaluate current reserve reports to estimate remaining recoverable volumes. Focus not only on proved developed producing (PDP) reserves but also consider potential for additional drilling, recompletions, or enhanced recovery operations. Take note of the well’s completion techniques, reservoir drive mechanism, and proximity to other producing wells or infrastructure, as these factors can offer insights into both current performance and untapped upside potential in the property.