Increased Profit to Trust Accounts Through Retention of Oil Properties In Trust
Authors: Dixon Bryan P. , Christian J. Roy 
Published: December 2007

This paper was prepared for presentation at the 47th Annual Fall Meeting of the Society of Petroleum Engineers held in San Antonio, Tex., Oct. 8–11, 1972. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by who the paper is presented. Publication elsewhere after publication in the JOURNAL paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made. provided agreement to give proper credit is made. Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.

Evolution of trust oil departments to provide significant management provide significant management capabilities now offers the owner of oil an properties a clear alternative to properties a clear alternative to disposition of his mineral interests sale. The choice will permit his estate to realize the profit from continued operations of properties that otherwise would inure to the benefit of the purchaser of these assets. purchaser of these assets. Functions of trust oil department and duties of trustee are discussed and a number of case histories presented to better illustrate various problems encountered and engineering approaches undertaken in profitable problem solving. Special emphasis is presented on the relatively new trust concept of acquiring producing oil and gas properties. These acquisitions provide a properties. These acquisitions provide a more diversified investment mix and generally provide a more favorable yield when compared to conventional investments.

Introduction

What would you do if you had three days to decide on investing $42,500 in a Panhandle Acquisition and Development Project? Due to our location in the largest oil-producing state of the 32 oil-producing states, problems and decisions of this nature are a weekly, sometimes daily, occurrence. More than 20% of our estate and trust accounts own oil and gas interests. Net oil production for our accounts averages about production for our accounts averages about 9,500 barrels per day yielding income to various beneficiaries in excess of $10 million per year. We presently are responsible for over 8,700 mineral properties of which almost 3,800 are properties of which almost 3,800 are producing oil and/or gas our producing oil and/or gas our operations in many respects are comparable to those of an independent oil company; in fact, the oil and gas income exceeds that of many such companies.

The independent oil man who owns oil and gas properties must have a degree of expert knowledge in order to rake decisions of growing complexity associated with management of these properties. properties.