I have no idea why youtube recommended this video to me, nor do I understand why I actually clicked on it. Here I am, grateful to have learned so damn much on a subject I never cared about but now I'm intrigued. Thanks for the video and I'm stoked to have happened upon it.
@TheZachLife
Жыл бұрын
Haha, thanks for watching.
@JakeToolson
Жыл бұрын
@@TheZachLife I'm convinced you could explain complex algorithms and we would be able to understand because of how you break things down.
@colliswilliams8992
7 ай бұрын
When you click on a video, it's logged into the system as part of a psychological map of all your interests and political leanings. Corporations use it to sell you stuff. The NSA keeps it so they know which camp to put you in once it's time.
@spanishtreasure9551
7 ай бұрын
@@TheZachLife dont forget to flip a few trucks , even pieces of equipment every year , you can find them in your area occasionally for cheap and get good money for them. always good to make extra $$
@wanderider321
6 ай бұрын
100% same scenario for me. ha!
@mikehamilton3833
Жыл бұрын
The oil business and the cattle business are both full of big money legends. Not true for the little independent operator. My dad said " all a man needs is 100 barrels of oil a day all his and he will do fine". Zach is the real deal. Nobody is getting rich. Just making a living at what he loves to so. Thanks you Zach.
@HiwasseeRiver
Жыл бұрын
I grew up in a ranching family. Some ranches around our had oil. My Grandfather told me a few wells made better calves because you could afford the feed.
@agtanalyzers6321
Жыл бұрын
I drove on 405 Santa Monica Getty center today, and the messy "art" houses reminds me of the hard work of an oil potato Zach
@coney2010grads
Жыл бұрын
Yeah $7000 a day would be nice 😆
@jttech44
Жыл бұрын
The way to do it nowadays is scale. You might only be making a few grand a well per year at first, but if you get yourself into a ton of wells over time, you start to both ease out the variability and make more money overall. Where most people get caught is the middle ground, they have the maximum number for them that they can manage themselves, but don't have time or money to jump into double or triple that number where you can keep growing so they stay stuck just barely getting by. Lots of ways out of that situation, most of which involve some hard choices.
@chadleywinnets
Жыл бұрын
And both are full of people who have irreversibly damaged the planet
@lakeguy65616
Жыл бұрын
How much money you make is none of my business. The economics of owning individual wells is interesting to me.
@zacharyb3991
Жыл бұрын
Agreed 👍
@jimba6486
Жыл бұрын
Why is it no one’s business? What is it about the amount you earn that is so intimate and personal? Do you measure your self worth to how much you earn?
@lakeguy65616
Жыл бұрын
@@jimba6486 I believe in privacy
@fauxbro1983
Жыл бұрын
Lol well guy did title the video how much he makes.
@roboticunclephil
Жыл бұрын
@@jimba6486 The ultra rich 1% would prefer we don't discuss finances because people would start to realize how hard some of us are getting boned, but this is exactly why we should, the idea that it's rude or unsavory or something is one of those weird social rules that doesn't benefit anybody at all, except for those rich guys of course
@RRaucina
Жыл бұрын
Really interesting to finally see how small oil operates in the USA. Such a obscure and closed industry outside of the oil fields and families involved. Important stuff here!
@flyboy6876
Жыл бұрын
You are refreshing to listen to, my young friend. I have been a petroleum engineer specializing in reservoir dynamics ( go Aggies) for 38 years, and I couldn't have explained it any better than you did.
@HiwasseeRiver
Жыл бұрын
38 years? Did I go to school with you? I'm A&M Class of '82, I have no idea how many years ago that is, I need Zach's spreadsheet. Gig'em
@connoraustin8434
Жыл бұрын
Whoop! 23'
@samlee1546
Жыл бұрын
Former welder here currently working in midstream. What's the top pay in the engineering field?
@RaisingAYoungMan
7 ай бұрын
Whoop
@MichaelWallace-g9r
11 күн бұрын
The question is how many wells does he own?
@Fundamntl_Force
Жыл бұрын
Absolutely fascinating. I'm an engineer in Canada that specializes in abandoning wells, I couldn't do yours for less then $20,000 (to our standards). A service rig is nearly $1000 an hour now. Our standards would be to use a service rig to pull rods and tubing, set a bridge plug on tubing within 15 meters (49 feet) of the perforations, pressure test, circulate to fresh water, and cap the bridge plug with 8 meters (26 feet) of oil well cement. Then cut and cap 1 meter (3 feet) below ground level. To do multiple cement plugs like you described, that's way more here. I am absolutely fascinated by how much more favorable your economics are.
@johnkufeldt3564
Жыл бұрын
As an Albertan I have always heaerd about the cost of abandoning, now I know why. Cheers from Calgary.
@okgroomer1966
Жыл бұрын
Do you have more gas in the area? Zach said he doesn't produce gas and I'd imagine that reduces the costs dramatically no?
@HiwasseeRiver
Жыл бұрын
@@johnkufeldt3564 Gawd Bless Corb Lund
@lucmarchand617
Жыл бұрын
I work on reclamation south calgary at turner valley the clean up cost near 1 millions and we have lot heavy equipment yes nothing cheap up north.
@Fundamntl_Force
Жыл бұрын
@@okgroomer1966 Most wells have some gas, so we have to run BOP's, and have a pump and tank. Plus winter is a thing, so a office trailer for the crew to warm up in. I watched Zach's rig video, very bare bones to what we run. He can get away with a 2 man crew, where as we need at least 4 just to move all the gear around, but normally its a 5 man crew.
@brucewilliams6292
Жыл бұрын
Thanks for sharing this. Really appreciate going over the cost of plugging the wells too. The fact that you have "skin in the game" and are not willing to scrap pieces of equipment or "write off" material is what makes small business great; they are far less wasteful of capital.
@johnjingleheimersmith9259
8 ай бұрын
Hmmm. I don't believe that. There's a reason a thing called "economies of scale" exists. If anything small businesses have got to be incredibly wasteful when it comes to capital. I mean I still support them wholesale over giant oligopolies for obvious reasons, but let's be real here, a mom and pop cannot possibly compete with the advantages in efficiencies of a large business.
@Mellowyellow8888
7 ай бұрын
@@johnjingleheimersmith9259 actually thats only partially true. You can cite economies of scale. But the problem is large companies care more about net profit vs effort.. You can say hey I can continuously keep it profitable.. but the end of the day management will ask your team to walk away from such low profit margins.. I work in oil and gas.. we're always looking for profit vs effort.. If i can make the big discovery by drilling only 1 well.. vs i have to maintain 1000's of these wells.. (which actually is impossible... because of the low headcount now adays..).. you'll see fewer is better.. because the reservoirs are larger..
@thebandofbastards4934
7 ай бұрын
@@johnjingleheimersmith9259 Economies of scale are better only in terms of throughput, but in terms of efficiency they become worse.
@lakeguy65616
Жыл бұрын
reading between the lines, you're in a business with large fixed expenses and moderate variable expenses related to maintaining "things". The key to your profitability is your ability to do so many things yourself and not have to pay someone else. Of course, that's completely ignoring your costs to acquire leases.
@therocinante3443
7 ай бұрын
Lucky for him, his family has owned them since 1959
@averyshaw2142
6 ай бұрын
Also a near constant stream of pure profit with no interruption from the wells with no introductions, the only disruptions being variability in price. Getting that straight oil money with no strings attached lets them take hits to their assets without a ton of risk, which other small businesses struggle to afford
@lakeguy65616
6 ай бұрын
@@averyshaw2142pure profit? These are, from what I can tell, stripper wells with low oil production and high water content. The cost of recovery is high for such leases. I think the key to profitability is Zak. Yes, the wells they've owned for decades are surely profitable but I assume their production declines over time. And clearly, Zak is buying other wells. Unless the sellers are idiots, Zak is paying market prices for his oil leases. Clearly, the key to profitability is Zak being capable of doing multiple jobs that most others would have to pay hourly for....
@garrison3675
Жыл бұрын
Super Kind of you, Zach, to run through all these operating details ... the independents like you keep a lot of wheels turning! ... Thank You ...
@jamesbarber3854
Жыл бұрын
I took a well that once that made a lot of water and a small cut of oil. 97% water saturation. I ran a 1/2" bottom hole choke below a AD-1 tension packer, a perforated sub above the packer then a seat nipple or tubing pump above the sub. It holds back the water. Same as perforating 1 hole in the top of the zone. I went from a skim of oil to 10 barrels per day. You may have to run a 3/8 or 1/4 inch choke in the positive choke nipple to hold fluid back. The perforated sub gives you a annualess on the casing.
@RustyShakleford1
Жыл бұрын
Let's hope he sees this
@sf4137
8 ай бұрын
Where's your video?
@jamesbarber3854
8 ай бұрын
@@sf4137 I didn't fill the need to video my work. Never have. Years of experience combined with old school knowledge. The ideal is to hold water back or slow it down. Some wells we had good cement across the zone with 97% water saturation. I drilled the wells myself and caught samples personally. Some I shot one hole in the top of the zone and the well came in flowing with no water. Some wells I didn't get a good cement job. Water pushed the oil away from the perfs. This method helped hold the bottom hole pressure back letting the oil enter the well bore. I had about 20' of sand, and only 8' of good oil sand on top. North Central Texas wells. I've done it in the East Texas field also. But most of these wells were big wash outs behind the casing. I could help the production very little. So I ended up handling the water with sub-pumps, and 192" stroke pumping units. East Texas saltwater takes the water at 6 cents per barrel 2000 barrels+ per day with around 60 barrels of oil per day. Was 250 barrels per day to 600 barrels of water for over 2 years in 2012, into 2015. These are old wells except for 2. Water drive.
@hamiltonharper
8 ай бұрын
I don't understand anything you said but it sounds correct.
@ayliniemi
6 ай бұрын
@@jamesbarber3854so if you sold one barrel for 70 bucks how much would you get after royalties and all expenses?
@MarioGoatse
6 ай бұрын
The internet is so cool. I'm sitting here in Sydney Australia at 7am with a coffee, watching you educate me on your oil lease. I love it. Cheers mate! Appreciate it
@alexanderbordeau7417
Жыл бұрын
I worked for Halliburton in Kern county from 1978-86 as a cementer, sand control & in fracking. your video was very enlightening. Thank you.
@nitrometh42
Жыл бұрын
Worked in the oilfield for a time as a pumper and salt water hauler. Great explanation. I never understood how "stripper wells" were economical but after seeing your spreadsheet and explanation makes sense. Of course, the producer is doing the math to make an economical decision. What baffled me about a well that I used to pump was a well that averaged 1/4bbl every week if I remember correctly and still was being reworked every 2 years. Great content. Keep posting.
@karatekid6026
10 ай бұрын
Somebody probably stealing some oil someplace and cooking the books on that 1/4 bbl a week well.
@ayliniemi
6 ай бұрын
@karatekid6026 Is it true that to uphold a lease the well needs to produce or certain amount or be plugged? And that operators will bring in oil from another lease tontge tanks and get it hauled just to make it seem like it's producing?
@akefayamenay104
Жыл бұрын
Thank you again for being willing to open the somewhat personal details to the public. I really appreciate that you included all the "safety margin" numbers of maintenance and taxes because those are important and so many people seem to ignore them (and then they wonder where all their money went). Sounds like you run your business in a fiscally responsibly way, which means you’ll better be able to weather the lean times.
@peterhodgkins6985
Жыл бұрын
Great explanations!! Having spent a good deal of my 30s/40s in various oil patches, drilling rigs and on gas pipelines as an OEM turbomachinery vendor, I well understand the costs associated with operation/maintenance/repair of this sort of equipment. I understood the business of leases a lot less than the equipment, so between this video and other ones you've done a while back, I've gained a bunch of totally useless, but otherwise fascinating knowledge about stuff I'll never again be involved with! ;) Beats hell out of the boob tube though!! (I blew up my TV in 1968!) Love the videos Zach. You're as real as it gets and I hope you can go on producing videos for a long time to come! Thank you as always for the time you spend on these videos!
@Krunch2020
8 ай бұрын
What is the cost of all of the carbon in the atmosphere?
@Old-biker
8 ай бұрын
@@Krunch2020How much C02 is in the air right now? what amount or present do you think it is?
@MegaDysart
8 ай бұрын
@@Krunch2020 probably trees growing, life on planet earth flourishing? oh right, carbon is bad for carbon based lifeforms now
@grdfhrghrggrtwqqu
7 ай бұрын
@@Krunch2020 If you count all carbon based life forms, I'd say in the billions of trillions.
@scottpollan8135
11 ай бұрын
dude, you taught this better than some profs at very expensive universities
@uwillnevahno6837
10 ай бұрын
You realize this guy thinks "inanswerable" is a word?
@gabelara5414
9 ай бұрын
@@uwillnevahno6837Regardless, he was able to teach valuable information in a way that people can take and implement into their own strategies. There’s a million facts a professor can learn from even a homeless man. One mistake doesn’t make the whole person. Find God.
@photonman48
8 ай бұрын
@@uwillnevahno6837 Just because his English isn't perfect doesn't mean he's stupid
@weslitton2567
8 ай бұрын
Yes because he does actually it vs read about it
@BearHawkful
8 ай бұрын
@@weslitton2567 You think profs at A&M don't "do it"?
@stevesmith2171
Жыл бұрын
Working for the majors in plants,pipelines,lease work,drilling etc etc,new hires have absolutely no clue how much money a company has invested in them before they ever set foot on a job site. You give a great explanation of everything. Tires,fuel,truck maintenance,tools,crackheads stealing tools and trucks and tires and fuel😂. Somebody asked a buddy of mine how much he figured his business would clear for the year. He told them he had no clue,there was still three months left and nothing had gone bad wrong yet. Such is life.
@jeffdavis1468
Жыл бұрын
Great videos. Very interesting for those of us never exposed to oil leases. Cool seeing a family business last so long.
@MohamedEmad-hp4xu
7 ай бұрын
God bless you zach. Showing us the unsexy reality of running your own oil wells. I 100% appreciate what you do and wish you a prosperous life and good fortune. Cheers.
@MrRcbeltz
Жыл бұрын
Great video. It’s unfortunate that people who have never run a small business fail to grasp the dynamics of “how much do you make with that?” There is a huge disparity in financial understanding between those folks who work for a paycheck vs. those who operate a business. It’s not how much you make, it’s how much you keep. I’m recently retired from 30 years with our small business and your explanation was a refreshing reminder of the difference between employees and entrepreneurs. Thanks for sharing. Randy
@sammyd7857
Жыл бұрын
If you don't make enough to keep any then how do you keep it.
@TheZachLife
Жыл бұрын
Yep 100% thanks.
@StackBundle
Жыл бұрын
Anybody asking how much he makes is really asking what his net take home is.
@rhatid
7 ай бұрын
What a great lecture on Applied Theory of the Firm - a retired university economics lecturer 👏👏
@sammylacks4937
10 ай бұрын
When I was very young my family dabbled in oil wells like yours in Kentucky. Ive always been curious about the process. Thanks for taking time to explain what goes into maintaining and making a profit from them.
@rollo7710
Жыл бұрын
My Dad had a plugging company back in the early 90's, he built a rig on a gooseneck and mixed the concrete with a hoe. Back then the RRC wanted all the "stripper wells" plugged, so he did it for free, if he could salvage the well. He sold all the pipe, pump, etc. then cleaned up the pad. He did quite well at it then he sold it, then he worked for that company before retiring for the 3rd or 4th time.
@advancednutritioninc908
Жыл бұрын
Zach, thank you for explaining costs and profits! I own a business and I clearly understand that it takes a considerable amount of gross income to make you a net profit! Glad you are making at least some profit!! much success to you!!
@charlesreid2141
Жыл бұрын
You have a gift of making things I don't give a damn about interesting. Your videos are extremely informative and I can almost smell the oilfields you work in. Keep up the good work
@FC-cz6zd
Жыл бұрын
Very fascinating. Just drove cross country from FL to CA. Saw a lot of these wells along the way. Thanks for a behind the scenes of how they operate and the gory financial details. You're a very good communicator.
@jamesbolen4872
Жыл бұрын
Thank you for this video. I’m from Texas and have another part of the equation. I worked as a lease operator for many years for many different oil companies, from very small operators to some of the largest in the nation, and all of the things that you covered are good to discuss. As an owner operator, you are very articulate, and bring light to others that don’t know the industry. Larger companies have different situations with wells that “don’t pay for themselves” they are left in operation because they are the “lease holder” if your long term plan includes potential new wells, that might not be financially back-able at the time, they are produced to keep from loosing the rights to drill.
@jeffpiatt3879
Жыл бұрын
I really like your channel! I was out in Midland, earlier this week, on business. Arrrived at 10PM and it was 92 degrees. There was a flare burning with a 30 foot high flame, across I20 from my hotel. I could feel the heat coming off of the flame, almost a quarter mile away. It's amazing how hot it is out there.
@abe2ham
Жыл бұрын
Hi there partner, Oh yeah we’ve been getting roasted by this recent heatwave out here in Odessa for past 3 weeks. Even though the feds have slowed down new well production these twin cities midland/odessa are still so overcrowded overpopulated for some reason feels strange now in 2023
@paulgoolsby6120
Жыл бұрын
Great job explaining the linear costs of running a marginal lease. You’re absolutely correct saying “It’s a job and make little money at it!” Companies buying up these marginal, low profit wells by the 1000’s are out there making a buck then shut them in and sit on them till prices come up. I would say your wells are better maintained.
@frontagulus
Жыл бұрын
This was a great explanation for how the revenue and expenses break down, and all the variables - thanks!
@chuckwinter8851
Жыл бұрын
Just started watching your videos , I’m from southern Ontario Canada.. I am fascinated with with the old wells and how the old timers did there job in the day, as described and explained by you.. I really enjoyed watching Franks well service rig tear down and Oklahoma jack videos.. love the content thanks 😊
@TheZachLife
Жыл бұрын
Awesome. Thanks for watching.
@clintonmississippi2108
Жыл бұрын
Zach, Thanks for the breakdown of operating an oil well and the expenses required to make the business run. I had no idea the costs incurred to operate an oil well. I kinda expected the dollars per barrel you received (gross) but did not know half the costs you incur to keep the well operating on a yearly basis. Again thanks for the breakdown of what's necessary to operate an oil business. Keep the videos coming it is all very interesting and I really enjoy listening to the way you explain things. I worked for a utility for 20 years and one thing I can suggest is; Google and study the theory and installation requirements for electrical surge arresters. All you need are the arresters, copper wire to connect them up and ground rods to complete the circuit. They could save you some money on motor and controls damage. My first thought is to ask your utility to add arresters directly at your tie point and then you can put them at each well for further protection. As a thought, based on your comments regarding reusing materials perhaps you could as a local lineman for the utility if he knows where you could get sone used arresters or if he knows of an abandoned line somewhere where you could scavenge the arresters. If they aren't blown up they are probably OK. As good as they are, if you get a strike at the pole they are mounted on, well nothing will help. (Ha) You are talking about millions of watts in that bolt of lightning. thanks for you explanation of operating an oil business,, Sam
@randacnam7321
Жыл бұрын
The level of lightning protection needed is what they do in much of Japan and Taiwan where there is a grounded static line over all the primaries.
@andrewallen9993
Жыл бұрын
Nothing stops a three kilometer long spark. EE here 😁
@Grantring-jv4us
Жыл бұрын
Absolutely spot on explanation! You have convinced me to change my mind of, ( a life long dream) owing my own oil well.
@RT-qd8yl
8 ай бұрын
I never understood the idea of it being rude to ask what someone makes. If nobody asks, the people in charge keep getting away with screwing us. It's not until we talk about it with each other that we realize how badly they're trying to screw us. I feel like THAT'S why they don't want people discussing incomes.
@genehenson8851
7 ай бұрын
Yeah. Secrecy about it only benefits those writing the paychecks.
@ryder8646
7 ай бұрын
@@genehenson8851 it's odd to me that people are often up in arms about their employer but far less bothered about the party that's taking 35% of everything they earn
@rhatid
7 ай бұрын
I absolutely agree with you. I'm an academic economist and to have worthwhile information I need to know how the money flows and I don't see asking as rude. I am willing to say what I earn if the cause is reasonable. Also, in this case, what harm could it do to tell me and all the people in KZitemland what it cost to run a well and the revenue it makes. I guess someone could make mischief with that information but I'm not curious enough to imagine what that may be , barring I'm a local tax officier and he is hiding income. My salary scale in the UK university is public knowledge though where I am on the scale is not but I would have no trouble revealing that.
@jaybarringer6514
Жыл бұрын
Honestly it really isnt anyone's business as to what you make I appreciate what you do share with us about your life keep the videos coming I always enjoy watching
@pattyeverett2826
Жыл бұрын
Good video and very good explanation. The well in Oklahoma that I get my small royalty check from makes around 5 BPD according to the statements I get. The statement lists the amount of oil it makes(per pay period, a month in general), the price received for the oil, the taxes, my percentage, and my amount. All of the other items you mentioned are taken care of by the operators. There were two wells on the lease, but one has not ran for a few years. The pump jack is still there, but major parts are missing. I suspect it is not profitable to fix whatever is wrong with it.
@stephengomolka9798
Жыл бұрын
Do you have any experience investing in publicly traded royaltys?
@pattyeverett2826
Жыл бұрын
@@stephengomolka9798 No.
@HiwasseeRiver
Жыл бұрын
I'm laughing my ass off - Anybody that gives you a hard time about your numbers has never walked in your shoes, that's for damn sure! One time I owned a piece of a little well that was making 100bpd total and 20 bpd oil at @40/bbl (1980's Cherry Canyon Ridge formation). One of the partners was a genius and convinced us to frac that well and bump the oil cut up (in his estimation). The frac job was not cheap but we were fixing to get wealthy(er). When the frac job was done the new water cut was 100%, zero% oil. The frac job had managed to water wet the formation and ruined the well for all eternity. That was one of my oil investment life lessons. As a bonus when you murder a well with stupidity you also get to chip in for the P&A because that's cheaper than perfing other shows behind pipe and your wallet is tapped out.. When you have skin in the game those lessons stick. LOL - keep at it brother! A feller needs a good number of wells to spread out the good news with the bad news. It's a delicate balance between poverty and acquiring bad habits. When I wised up I decided to buy big slab of Exxon (XOM) in the 90's. That investment has grown and now Exxon sends me a nice check every 90 days and I don't have to sweat the details of every well. I also own a chunk of Devon (DVN) - at the moment the investment is in the red! I never said I learned it all! When it's all said and done I made the most bank just working my ass off all over world, working as much overtime at premium rates as my body could handle. Property taxes - most folks outside of TX don't know about property taxes and TX property tax districts. Folks think TX is a tax free zone, they load the U-Haul and move to TX - they get a life lesson welcome to Tejas from the taxing districts. Opps
@davidwright1752
Жыл бұрын
I have learnt the same lesson re general business the government compliance cost in Australia are extortion. Gave up and just become a share holder in the stock market.
@72plyduster1
Жыл бұрын
Thanks for the explanation, what I got out of that is that you need a lot of wells which means a lot of work on your part to keep everything operating, what most of us don’t consider is the time and money you have to put in to keep everything running and producing. I relate it to one of my uncles he was a dairy farmer he never took a vacation always either milking ( twice a day 365), planting,harvesting,taking care of the cows, and a lot more.
@HiwasseeRiver
Жыл бұрын
He owns some fraction of the well and 100% of the headaches.
@phlgriffin
Жыл бұрын
Thank you so much for trying to explain all that is involed in your business. I used to live in Tx. and drive by those pumps running and wonder how it all worked. I remember staying in Ft. Stocton a few days and seeing all the guys in oil field services and image what it would be like maintaining all these smaller wells. Today, as an old retired guy, I'm grateful for my investments in EPD, and XOM to help with S.S but I much appreciate the hard working guys, that despite the govt. keep this country running! Thanks again.
@dennishinkle5010
Жыл бұрын
On a secondary recovery well it takes even less to make profit. How old the well is helps determine its profit potential. Saying how many times has it paid for itself. The depth also makes a difference. Electricity is the first cost then royalties to land owner if any then taxes and then upkeep and paying oil company to haul the oil. There are so many variables it's really difficult to figure with much accuracy. I am a veteran of the oil field from way back here in Texas.👍 Great video Zach.
@HiwasseeRiver
Жыл бұрын
I can't think of anything more typical of Texans (the real ones) than dranking coffee, looking up running the numbers in your head like ole Zach.
@wingingit9493
Жыл бұрын
People have no idea how much it cost and margins on oil lease's. You have more bad years than good years. Now that does not mean a bad year is a bust. But every once in a while you will have a complete and total bust year. I had to shut my operation down one year and it was a bust year. Not worth it for me to pump oil at under $7.00 a barrel. I filled up my tank battery's, locked them up and set on the oil until prices came back up. But that did not mean there was no work to be done and money did go out. Those times are when your cleaning out and repairing your separators, doing down hole work, replacing production pipe and distribution pipe from the wells to the tank battery's. Cleaning up the land and staying a head of in my case the OK. Corp. Comm. and the EPA. I ran big over sized injection pumps so I could turn them real slow, keep the load down on there motors. But you still have to repair them. And it's no joke if you don't own the land and mineral rights. Being the outright owner now days in oil country just about never happens. Insurance and just general operating cost can smoke your ass. Is the well a old cable tool well or was it rotary drilled. What formation is it in? Or do you have multiple formations you can produce. I produced from the B'ville Sand, shallow wells down to the Arbuckle and upper ends of the Mississippi and a few other formations. Sometimes you can rest a well if that well rat hole is a honey hole,,, but those are rare and they will play out. Natural gas more times than not is a bigger pain in the butt than it's worth. Best case is you live out on one of your oil fields and can heat your home and use NG to power pump jacks and a injection pumps. But to make enough to market and go through all that crap. It's not worth it because you will end up almost giving it a way. There are thousands and thousands of NG wells capped off all over the southern and gulf states. In states that are not even thought of as petroleum states. I have a old well in my back yard that is plugged. They stopped production on it in 1920 and my house was built in 1921. I have the land and mineral rights. The old well was plugged with pecan tree limbs. They just pounded them down the hole and called it good. They stopped production when it stopped flowing and it has never been pumped. So I know it will produce. I'm retired now so it can set unless we have a complete economic collapse. There is soooo much involved in production and management one can not explain it all. And none of it is easy and it all cost money.
@SniperPetro
Жыл бұрын
hey, wingingit! I think we may not live very far apart. I'm North of Tulsa, getting ready to buy my first lease here, and was planning on running a natural gas generator for my lease instead of buying from verdigris valley Electric Coop. Going to pump my own wells, do my own service work. It's just something to keep me busy and give me something to do, which will be used for extra income/economic collapse as you also stated! I will make sure I have plenty of oil storage tanks so I can stockpile and sell at top market prices ;P
@wingingit9493
Жыл бұрын
@@SniperPetro You getting a lease in Rogers county? I use to have a few around Chelsea. There were some good ones on the east side of the lake.
@demartin5366
Жыл бұрын
Another great video, Zach! You have done an excellent job explaining the business end of a lease operation. I have learned so much from watching all your videos. I like the way you tell it like it is. Thank you for taking the time to put these together while working the leases at the same time. It is so nice to see you enjoy your work and sharing your valuable knowledge with others. Keep up the great work!
@captainjohnh9405
Жыл бұрын
Zach, this video answered a ton of my questions. Well Done, Sir. Also, I love the walking beam model you have in the background. One of my hobbies is restoring hundred year old model stationary steam engines. The walking beams are always my favorites.
@johnparker221
Жыл бұрын
What you sell a barrel oil for and what profit you have at the end of the year are two different things. Also the profit that you make depends on your accounting. Like you said. Your one well only makes you any profit because you have two others that share some resources. In fact, you can have no declared profits and continue happy for many years. Lots of companies have to write down equipment for years until they actually have profits to pay taxes on.
@jakesvideos8204
Жыл бұрын
I wish I could come help you operate and/or drill new wells, I have lots of experience operating rigs/driller, mud engineering, and drilling related, I am close to the same age and made a good living in the oil patch, I quit drilling in 2015 and shortly after took a a stable government oil and gas inspector job but at least I sleep in my own bed 99% of the time. This may be a horrible thing to wish for but I hope i own a few leases one day, or one lease with some good wells, Great content and great job, thanks for your videos! If you ever take the “toter home” to northeast utah I have about 20 acres you can camp at bordering forest and blm land, also have welders and a shop for repairs, Be safe and may god bless you my oilfield brother.
@cary7721
7 ай бұрын
You can buy those stripper leases in N Texas, they're around and available. Then you just hire a pumper, which is pretty easy to do as well. A good price to pay is about $10-15k bbl. So, if the lease makes 1bopd, a decent price is $15k. A lease that's making 10bopd, $150k .. Most of the time, the seller of the lease will have an old pumper that will stay on.
@dominicormston
7 ай бұрын
Even though I have never searched for how oil is pumped... This was fascinating...
@tommyhunter1817
Жыл бұрын
Take it from me as a farmer. DON’T determine how much it costs you to operate a business. You will just be depressed. LOLOL
@rhatid
7 ай бұрын
🤣😂
@roadboat9216
Жыл бұрын
Thanks. Very well presented. I have owned a few small businesses and people don’t realize the operating expenses and how that effects actual profit. Well done.
@zowiefenderblast4602
Жыл бұрын
Enjoy your content and advice! I jst burnt the heck outta my hand on my grill hood chasing after my dog off the deck...
@VenturiLife
Жыл бұрын
$ per barrel per annum is just gross income, not net income after expenses like parts, repairs, etc. The people doing well out of this are the mineral owners as they don't have any of the headaches / risk, just collecting income.
@matthewmcdaniel8846
Жыл бұрын
Great video my friend, well put, to the point, and sure it answered a lot of questions for folks who’ve never been around the Oldfield or worked in it
@adammegandavis
Жыл бұрын
Thanks for sharing Zach. Your income is none of my business. I just appreciate seeing real numbers on operating and maintenance costs.
@stovebolt448
Жыл бұрын
Hi Zach. Well thanks for all the info, interesting, you do work your butt off. I still must be old school it's just no ones business how much money you make, but gads the money you pay out for equipment is staggering. Ok Zach take care and hope ya hit the mother load of oil wells😁and get richer than snot😋.............................see ya
@TheZachLife
Жыл бұрын
Haha thanks.
@bdayo4406
Жыл бұрын
Great Info. I have hauled oil out of the oil fields of Wyo. and Colo. and always wondered how this part of it worked. Thanks!!!
@Deepakshrikhandesir
Жыл бұрын
All students Say GM to ZACH SIR... BEST TEACHER... WHO TEACH US PROPER KNOWLEDGE.... DEEPAK SHRIKHANDE SIR JALGAON MAHARASHTRA SAFETY INSTRUCTOR MUMBAI GOV. APPROVED INSTRUCTOR... 🇮🇳❤️🇺🇲👌💐🙏✊.
@eaglezxz3354
Жыл бұрын
Thnx for taking the time to explain your buisness.Very interesting.
@chrislindquist2003
Жыл бұрын
Zach, no one has the right to know how much you make. Thank you for taking time to explain how the economics work for that well. Always interesting!
@okgroomer1966
Жыл бұрын
True but he did make a channel to share his life. Naturally people are curious to know the details. He doesn't have to share, but I think he gave people a good enough idea what the economics of this life are. It's not like people were asking for exact dollar amounts in his personal accounts.
@dan827
4 ай бұрын
Great video brother. Wisconsin here. Very mechanically inclined, own my own business and things. I found this video by random, and I'm glad I did. Very interesting. Thanks.
@TheZachLife
4 ай бұрын
Thanks for watching.
@firstmkb
Жыл бұрын
Hey, thanks for sharing this! I always wondered about the random pump jacks I see in Illinois cornfield. I wanted one until you mentioned figures like 1/5 bbl. per day. My dreams of easy riches have been crushed by reality AGAIN. 7:56
@ccronn
Жыл бұрын
People that have no real world experience, and no feel for business have no ideal what it takes to run a business. The narrow minded person sitting behind a computer typing away has no clue what it actually make a profit. No clue at all. From a belt to a valve they cannot see beyond the simplest of scenarios. Way to have your head in the game Zach, your a big picture guy! You are a rare breed indeed! I call you my brethren.
@kylebroflovsky6015
Жыл бұрын
Hi Zach, I am always impressed by your working man’s knowledge of the complexities of running a productive enterprise. I’ve watched as you are in your work shed or out in the awful Texas weaTher minding your business. Good on you whatever you earn for your efforts. You did touch on though early in the video a significant element of the cost structure, taxes. I realize that cost is passed on to the consumer. I am as well aware that I as the consumer also pay taxes when I buy a gallon of gasoline. I live in the northeast and there’s a high cost of living here. In the state I live in, federal excise tax plus state gas tax amounts to 42.4 cents per gallon. During the gas price situation in 2004-2005 I learned a petroleum company’s profit on a gallon of gas is from 5 to 7 cents a gallon. So, who really is the big scary oil profiteer here? The people who produce or the government which just waits at the finish line?
@TheZachLife
Жыл бұрын
exactly 100%
@DominiAeternum
10 ай бұрын
The big guys have tons of write-offs and loopholes in the tax code written specifically FOR them that drops their profit down to the amount you listed. If you saw them daily 24/7 & watched & counted what they claimed as "expenses" you would probably laugh & cry at what they get away with though. The big fish always dictate everything, no matter the business.
@slenderkid1018
Жыл бұрын
This is the damned best video I've seen lately. I always wanted to know the general numbers of the business. I based my numbers upon producing 10 bbls per day and running for 100 years just like Zach. Oh, I can't wait until that first $100 k check gets here. Gonna get me a new Cadillac w spinner rims and haul my tools in the trunk. Life will be grand. Right now the RRC is looking at my crap. Once approved, I will have 1 of a million wells that don't produce anything. Then, the fun starts.
@sirtango1
Жыл бұрын
You forgot to add the price of the oil well seeds! I retired from the natural gas industry. We drilled a well or two that produced a little oil. We sold those wells to an interested buyer. Our average well was around 4800-5000 feet. We went as deep as 10k feet exploring. We did everything from directionals to core drilling. There is nothing cheap in the oil and gas industry. We had to go through hard blue limestone to reach our pay zones. We had mostly high pressure low volume wells. 1440 natural formation pressure. Later when he fields played out we turned them into storage fields. Then we got into the salt caverns.
@bendercs
Жыл бұрын
You were raised properly.
@userx702
Жыл бұрын
As someone from much deeper well plays, your plugging expenses make me wish I was in Texas and would work because I would own some wells. Up in the northern stretches of the USA they make you freepoint then cut the casing and pull it all before you cement back. So you're talking a LOT of money to do it all. I would venture assuming everything goes ok, by the time you have a casing crew, a rig(double), cement company, , tool hand, you're probably close to 60-80k. Let alone hauling any sort of flush production or whatever assuming its not hot pipe which then you fall into remediation. Appreciate all these videos and info you put out there. Its great to see.
@markbernier8434
Жыл бұрын
I think this is valuable for anyone considering a business venture. The gross profit /widget made may look huge but most don't understand how much all the periphery of a business costs, right down to floor sweeping and paper clips, eats into that. You also mentioned insurance. I would be curious to know what that costs in the US because that shows the perception of risk by the underwriters.
@fowchiiiliedpuppiesdied
Жыл бұрын
Such a positive outlook.
@hangman396
Жыл бұрын
What you make is all for you to know, not everyone understands the economics, or the amount of cost per well... You do have good points, but again what you make is your business... Oil is a lot like Trucking, you make a living, but you don't get rich...
@alro2434
Жыл бұрын
Thanks, we all knew you were making the big bucks because of all those designer T-shirts & CNC & digital-readout machinery in your shop. Nice work man! :) :) :) Also, when oil dropped to $0 during Covid, were you at capacity & forced to sell it, or just cut power & wait it out?
@TheZachLife
Жыл бұрын
I would like to touch on this when I get back to the bbls into dollars series, but long story short we had already sold some oil that month and when the price went negative it basically wiped out that months check.
@texasoil2010
7 ай бұрын
From one oil and gas operator to another..... Very well done my friend! Happy Drilling! Drew🙂
@TheZachLife
7 ай бұрын
Thanks 👍
@gordonbone3689
Жыл бұрын
I worked in the oil fields in Canada. These wells do not produce 100% oil 100% of the time. There are other liquids in it.
@deltaskyhawk
Жыл бұрын
I always wondered how that oil well business works. Thanks for sharing!
@northface484
Жыл бұрын
Do not tell them the Gross on T-Shirt Sales....!!!!
@TonyLasagna
Жыл бұрын
Was nice of you to put this together, Zach. No ones business what you make on anything, but it was a fun an educational watch!
@elcheapo5302
Жыл бұрын
"Crack pipe looking device" 🤣 Thanks, Zach. So your oil gets pumped into the big black tank, then what? Does a truck come and empty it periodically? On call?
@AIM54A
Жыл бұрын
Nice thing about a big tank is you can sit on the oil and watch the market and try to sell your oil when you make the most from it. Same thing with say a grain elevator/storage for farmers.
@nunyabusiness2294
6 ай бұрын
Wow! That's a lot of very cool information about a subject I had never even thought about before. Thank you for sharing-this is quite a rabbit hole you've sent me down. Thank you for your candor and putting real prices and costs with the information!
@hoyden53
Жыл бұрын
Thank you for explaining the numbers. I appreciate your sharing your experience and perspective as an Oil Man. Is that a Stirling Engine sitting on top of your file cabinet? I have 4 Stirling Engines and would like to know more about yours.
@TheZachLife
Жыл бұрын
it's a steam running on a fishtank pump.
@jefffikes4716
Жыл бұрын
I really, really enjoy your videos. You would make a great college professor. Your parents did a good job raising you.
@johnfry9010
Жыл бұрын
Zach , I personally think it's not anybody's business how much money you make , It is bad enough we have to tell the IRS .
@polaris1985
6 ай бұрын
Its amazing that people are able to pump out their own oil in US, I did not know they make so less for these small wells, very complicated buisness.
@edkeniston4786
Жыл бұрын
Don’t get frustrated. You are correct, that is a rude question to ask! That being said, the people asking obviously have no idea how a business operates. Some of us enjoy learning new things, round numbers are close enough for my education. There are so many incalculable exspenses in a business like yours, you’d go mad trying to put a cost on each well. Keep doing what you do and don’t let the few sour you on videos.
@okgroomer1966
Жыл бұрын
Is it when he made a channel to share his life? Normally I'd agree but this situation is a bit different. He still can not answer but the curiosity from people is fair. He gave up some of his privacy after making the channel.
@zeon5323
Жыл бұрын
This was a good video. BTW, I love the pumping unit on the file cabinet.
@lakeguy65616
Жыл бұрын
One other question occurs to me.... When you acquire leases, do you expect to improve production or maintain production at the current level? In other words, are you looking for underperforming wells that you can improve?
@realemonful
Жыл бұрын
Why don't you tell us about YOUR income?
@bigdog2024
Жыл бұрын
Even if other leases nearby make more oil, every well is different so there is no absolute way to know this lease isnt producing the best it can. I suppose if you looked it over and found equipment issues that can cause problems you would get some sense it could be increased but that’s about it without knowing a lot about the history of the lease and the geology of the field. Investing in new leases is very much a gamble. But if the cost is very low it could be worth a chance. In Zacks case they would also need to be nearby to him as he does most things himself so driving a couple hours each way to check or fix something wastes a lot of timr.
@caseymitchell5477
Жыл бұрын
The only way you will improve production on an old lease, is if there are wells that were left down, you shoot another zone, or push water. Cleaning up the wellbore helps, but from experience it only gets you flush production, the well returns to normal after a couple weeks.
@bigdog2024
Жыл бұрын
@@caseymitchell5477IF there is another zone and if the wellbore is safe to re-enter.. Some older wells have stepped up after fracking but that’s very expensive. Always wondered if re- entering and running some horizontal legs would pay off but that’s a big investment as it requires a rig on site for weeks. Water flood is a cheap way, but that requires a lot of water injected at high pressure and might be outside the comfort zone of smaller producers. Sometimes all the lease owners in an area jointly pay for that based on their fractions of the overall field production.
@CuriousEarthMan
3 ай бұрын
After watching dozens of rig work videos (tripping, drilling, and so on) this popped up. Great video! I want to see more. I subscribed!
@TheZachLife
2 ай бұрын
Awesome Thanks.
@kevinhoffman8214
Жыл бұрын
well Zach I prefer you LIE to us and tell us you making J.R.EWING money - then the next videos will be who killed ZACH !!! ohhhnooo !!! :)
@leroyjones6958
11 ай бұрын
Very good. It is great to hear straight talk from a straight-shootin' guy. Good work!
@Hiei2k7
Жыл бұрын
Hey Zach, I wanted to thank you for taking the time to explain (over many videos) about how different forces affect you on the financial side of keeping these various rigs, leases, and deals in play running. I do have one question since you have a lot of electric-tied wells and other connections to grid around you. Is there any incentive or even ability (given the nature of these leases) to build a solar panel near the well to either offset electric consumption or to increase revenue?
@Brad.whatthe
Жыл бұрын
So your not making private submarine ride money 😒
@skydouglas996
7 ай бұрын
Very impressive analytics of running a small oil lease. Don’t know how this video popped up for me, but now I’m a subscriber.
@chriss1728
Жыл бұрын
All liberals should watch this!!!
@joezip6389
Жыл бұрын
Thank You for this information. I find it so interesting learning about things I have no clue about but I am curious
@carabela125
6 ай бұрын
When I graduated I was offered a job in the oil business but decided to go into electronics instead. It's interesting to see what I missed out on.
@GregSolon
Ай бұрын
Great explanation! Sorry about the stupid commission nightmare.
@russellknight26
Жыл бұрын
The economics and operation requirements are different In Alberta. Very interesting to see how regulatory entities and governments can take something simple and fuck it right up.
@davidsmith3736
Жыл бұрын
I really appreciate you sharing this as it gives me an idea of what's involved as I might need this in the near future.I new to this so it was very informative.
@lorenwilson8128
Жыл бұрын
Pretty high water cut. Very interesting presentation.
@Old-bold-pilot
Жыл бұрын
Enjoyed your rambling very much
@SnoodleMeTimbers
9 ай бұрын
I work up in northern alberta Canada... i have worked on wells that make 3600 barrels a day... this video was a big eye opener
@6ftS
7 ай бұрын
great video for a technically minded entrepreneur that is always running numbers and viability concepts. Your breakdown is very interesting. Thanks for taking the time to show what it takes to extract some profit from a small oil rig.
@redcarbon4395
Жыл бұрын
There is no way to put a $ figure on your knowledge and experience. Appreciate the videos. Love learning new things that I would never do. A lot of respect for keeping the family business alive. You show that you really enjoy this job, along with carrying on the family business. As I'm just 1 viewer, you don't need to prove anything to me by talking about profit margins or justifying something you do. Dirt in the knuckles and worn out shirts should say it all to those watching.
@marktaylor4458
11 ай бұрын
This a great informative video. I have worked when I was younger, on drilling oil and gas wells and workover wells and I have always wondered about cost and profit on oil wells. Thank you.
Пікірлер: 1,1 М.