Revdex.com:
This letter is to inform you that Fossil Oil Company, LLC has carried out to my satisfaction the resolution it proposed for my complaint, filed on 10/14/2015 1:59:02 PM and assigned ID [redacted].
Regards,
Hi Revdex.comI would like to withdraw my complaint that against...
fossil Oil Company on Oct, 14, 2015. So, please remove the complaint completely. Thank you for your help.Best,[redacted]
Good Afternoon [redacted], You have recently called and emailed our offices, relative to the status of the Rush Creek-II Program, and the recent “Cash Call” you received. You have also expressed your dissatisfaction with Fossil Oil and the results of our Program. In addition, you have...
filed a Complaint with the Revdex.com. For your information, below is a Summary on this Program and the various Wells. As you will recall, this was a 4-Well Program, and based on the 3-D Seismic and Geological Evaluations, everyone was very optimistic on the success of this Program. The 1st Well, the Cooper Well drilled in the Tic Tac Toe Prospect, came in very strong. The primary zone was the Basal Oil Creek Sand, and we hit that pay formation right in the heart of that zone! The initial Oil and Natural Gas being produced was excellent. Unfortunately as the months passed, the production continued to drop. When the production rates became non-commercial, Ranken Energy decided to move up higher, sent a Cast Iron Bridge Plug (CIBP) over that Basal Formation, and perforated the next higher zone…the Bromide Formation. That Formation had looked strong on the Well Logs, but when it was perforated the primary fluid being produced was saltwater, not oil or natural gas. Numerous tests were run (very expensive tests), to determine if the saltwater was coming from that zone, or was channeling behind the casing from another higher or lower zone, into our newly perforated zone. The use of costly radioactive tracers to help identify the source of the saltwater was applied. Following that, expensive operations were performed employing a “Cement Squeeze Procedure”. This involved perforating additional areas in the productive casing both above and below the Bromide Zone. Cement was then squeezed into those new perforations, hopefully to make a seal from further saltwater communication from other zones. After the cement cured, the Cooper Well was then re-perforated, but again the fluids produced were primarily saltwater! It was very disappointing to everyone, including our Investors and Fossil, since as you know Fossil shares in the revenues on the 80/20 basis. If there are no revenues for our Investors, Fossil also receives no revenues. That Cooper Well was eventually plugged. The 2nd Well, the Kyle Well (Batter Up Prospect), unfortunately did not hit any commercial zones that were worthy of completing. The Mud Logs had indicated potential areas, but once the open hole logs and cores were run and evaluated, there were no zones capable of economic production. Thus that Well was plugged. The 3rd Well, the Douglas Well (Gambler Prospect), was drilled and completed. The logs indicated several strong zones, but as each of those zones were perforated, the actual production of oil and gas was minimal. Various expensive acid stimulation procedures were applied to these zones in hopes of opening them up for better production. These procedures were not very successful, and the Well continues to produce at very minimal levels…..less than 2-3 Barrels of Oil Per Day (BOPD). The monthly operating costs at such a low level are really not economic, and Fossil has advised Ranken that that Well needs to be plugged to avoid future operating costs on a well that is no longer commercial. The 4th Well, the Seth Well (Little City Prospect), was also drilled and completed. The initial production was very encouraging. However, this Well also started to decline in production fairly rapidly. Additional zones were perforated and various acid stimulation procedures were followed, hopefully to help open up the zones for additional production. These also have proved to be disappointing. The Well is still producing, but at very minimal rates. Fossil’s President personally invested over a $ Million Dollars in order to Buy-In to Ranken’s newest 3-D Seismic Data, and to provide Fossil with a preferred position and “Right of First Refusal” to participate in Ranken’s future Programs. These subsequent Programs were also disappointing and Fossil has made a decision to no longer participate in any Ranken future Programs. Besides losing the payment for the 3-D Seismic, Fossil also lost hundreds of thousands of dollars in cost overruns on the drilling and completion operations on some of these Wells. The on-going operating expenses have caused Fossil to be significantly “Under Water”. Fossil has attempted to carry these operating costs, but they have now become so large that “Cash Calls” were a necessity. Believe me, that was the last thing Fossil wanted to do, knowing full-well that this would further anger and irritate our Fossil Investors, who were already extremely disappointed with the results of the Programs, not receiving much if any revenues from their investments. If you decide not to forward the “Cash Call” because of various financial reasons, you can go “Non-Consent”. Then that amount of the cash call is subject to the 300% penalty. That means before you can again be entitled to receive revenues, three times (3 X) the amount of the cash call, must be distributed to the company or person who pays that amount, before you can start receiving future revenues. For your information, Fossil is currently negotiating with Ranken to have Ranken “take back the non-commercial wells”, so Fossil and its Investors can avoid future situations where the operating expenses continue to exceed any revenues from the particular Well. Hopefully this provides the specific information you desired. Call if you have additional questions. Les K[redacted] Les H. K[redacted] Vice President, Business Development
Revdex.com:
This letter is to inform you that Fossil Oil Company, LLC has carried out to my satisfaction the resolution it proposed for my complaint, filed on 10/14/2015 1:59:02 PM and assigned ID [redacted].
Regards,
Hi Revdex.comI would like to withdraw my complaint that against...
fossil Oil Company on Oct, 14, 2015. So, please remove the complaint completely. Thank you for your help.Best,[redacted]
Good Afternoon [redacted], You have recently called and emailed our offices, relative to the status of the Rush Creek-II Program, and the recent “Cash Call” you received. You have also expressed your dissatisfaction with Fossil Oil and the results of our Program. In addition, you have...
filed a Complaint with the Revdex.com. For your information, below is a Summary on this Program and the various Wells. As you will recall, this was a 4-Well Program, and based on the 3-D Seismic and Geological Evaluations, everyone was very optimistic on the success of this Program. The 1st Well, the Cooper Well drilled in the Tic Tac Toe Prospect, came in very strong. The primary zone was the Basal Oil Creek Sand, and we hit that pay formation right in the heart of that zone! The initial Oil and Natural Gas being produced was excellent. Unfortunately as the months passed, the production continued to drop. When the production rates became non-commercial, Ranken Energy decided to move up higher, sent a Cast Iron Bridge Plug (CIBP) over that Basal Formation, and perforated the next higher zone…the Bromide Formation. That Formation had looked strong on the Well Logs, but when it was perforated the primary fluid being produced was saltwater, not oil or natural gas. Numerous tests were run (very expensive tests), to determine if the saltwater was coming from that zone, or was channeling behind the casing from another higher or lower zone, into our newly perforated zone. The use of costly radioactive tracers to help identify the source of the saltwater was applied. Following that, expensive operations were performed employing a “Cement Squeeze Procedure”. This involved perforating additional areas in the productive casing both above and below the Bromide Zone. Cement was then squeezed into those new perforations, hopefully to make a seal from further saltwater communication from other zones. After the cement cured, the Cooper Well was then re-perforated, but again the fluids produced were primarily saltwater! It was very disappointing to everyone, including our Investors and Fossil, since as you know Fossil shares in the revenues on the 80/20 basis. If there are no revenues for our Investors, Fossil also receives no revenues. That Cooper Well was eventually plugged. The 2nd Well, the Kyle Well (Batter Up Prospect), unfortunately did not hit any commercial zones that were worthy of completing. The Mud Logs had indicated potential areas, but once the open hole logs and cores were run and evaluated, there were no zones capable of economic production. Thus that Well was plugged. The 3rd Well, the Douglas Well (Gambler Prospect), was drilled and completed. The logs indicated several strong zones, but as each of those zones were perforated, the actual production of oil and gas was minimal. Various expensive acid stimulation procedures were applied to these zones in hopes of opening them up for better production. These procedures were not very successful, and the Well continues to produce at very minimal levels…..less than 2-3 Barrels of Oil Per Day (BOPD). The monthly operating costs at such a low level are really not economic, and Fossil has advised Ranken that that Well needs to be plugged to avoid future operating costs on a well that is no longer commercial. The 4th Well, the Seth Well (Little City Prospect), was also drilled and completed. The initial production was very encouraging. However, this Well also started to decline in production fairly rapidly. Additional zones were perforated and various acid stimulation procedures were followed, hopefully to help open up the zones for additional production. These also have proved to be disappointing. The Well is still producing, but at very minimal rates. Fossil’s President personally invested over a $ Million Dollars in order to Buy-In to Ranken’s newest 3-D Seismic Data, and to provide Fossil with a preferred position and “Right of First Refusal” to participate in Ranken’s future Programs. These subsequent Programs were also disappointing and Fossil has made a decision to no longer participate in any Ranken future Programs. Besides losing the payment for the 3-D Seismic, Fossil also lost hundreds of thousands of dollars in cost overruns on the drilling and completion operations on some of these Wells. The on-going operating expenses have caused Fossil to be significantly “Under Water”. Fossil has attempted to carry these operating costs, but they have now become so large that “Cash Calls” were a necessity. Believe me, that was the last thing Fossil wanted to do, knowing full-well that this would further anger and irritate our Fossil Investors, who were already extremely disappointed with the results of the Programs, not receiving much if any revenues from their investments. If you decide not to forward the “Cash Call” because of various financial reasons, you can go “Non-Consent”. Then that amount of the cash call is subject to the 300% penalty. That means before you can again be entitled to receive revenues, three times (3 X) the amount of the cash call, must be distributed to the company or person who pays that amount, before you can start receiving future revenues. For your information, Fossil is currently negotiating with Ranken to have Ranken “take back the non-commercial wells”, so Fossil and its Investors can avoid future situations where the operating expenses continue to exceed any revenues from the particular Well. Hopefully this provides the specific information you desired. Call if you have additional questions. Les K[redacted] Les H. K[redacted] Vice President, Business Development