The Osage Minerals Council received a grant award in the amount of $73,637 for a project to acquire and digitize geophysical well logs, production data and lease records on the Osage Mineral Estate.
Jack Stevens, acting director of the Office of Indian Energy and Economic Development for the Department of Interior awarded an Energy and Mineral Development Program grant (EMDP) to the OMC.
“The shareholders should feel proud that they themselves (via the council) engaged a lawyer/grant writer, paid for service and costs, lobbied Washington, and was awarded this historical grant,” said Councilwoman Stephanie Irwin.
Grant goals and objectives
The project will result “in the first electronic inventory of well location and lease information for the Osage Mineral Estate” and “establish and maintain an accessible, digital database of lease records, well logs, geophysical data, and production data for the Osage Mineral Estate,” according to the grant.
Oil and gas producers rely on lease records and production data in making judgments on when and where to invest, sometimes investing millions of dollars. Presently, in order to obtain this information potential lessees are required to submit a formal request under the Freedom of Information Act to the BIA, which can be a long and drawn-out process. When information is made cumbersome and difficult to obtain, investors will move on to a more business-friendly environment.
“The OMC intends to create a complete data set in a standard format that interfaces with a wide range of petroleum software programs, which will assist the OMC in monitoring lease activity and identify open acreage and leases soon to expire,” according to the grant. For example, “the creation of up-to-date lease ownership maps … will attract investors and production companies by expediting queries and mapping of well and production data.”
The BIA’s lease and well records for the mineral estate are not digitized and there is no up-to-date central leasing record.
The public and the BIA must review paper leases and drill records to identify the location of leases and wells and which ones are in production. An online, updated, electronic lease file system will help locate lands available for leasing concession agreements, according to the grant.
Existing electronic data will be gathered and utilized by the OMC in building the database.
“The Osage Nation Department of Environmental and Natural Resources (ENR) uploaded approximately 10,000 well records dating from 1912 to 1980, and will represent a great starting point,” according to the grant.
Many producers have expressed their willingness to provide the OMC with information to aid in the digitization project.
The mineral estate has a long and significant production history and with the development of the database the OMC will be able to use existing production data to predict future production and ultimate recovery for any well or field proposed in Osage County, according to the grant. “This would generate an immediate benefit to the OMC and the Headright owners by creating an advantage in negotiating lease terms, including bonuses and royalty rates,” according to the grant.
The project will eventually aid in identifying prospective areas for field development by the OMC.
Osage Minerals Councilmember Galen Crum said this project has “the potential of being one of the most important accomplishments of the Osage Mineral Council. The largest historical repository of production data is here, in the Osage. But it’s all on paper. Digitalizing the information allows us to get information out to many more producers, and see what they may be interested in. I see nothing to hold us back, to bring in new companies.”
Councilman Talee Redcorn sees the grant project as a “great opportunity and the first steps toward digitized solutions to prospecting for oil and gas.”