Ramsey Property Management, LLC provides professional management for oil and gas properties. We have the capability of providing all services normally performed by a production and accounting division of any larger oil company. The property management function is supervised by a registered professional petroleum engineer with many years experience in production operations.
Ramsey Property Management proposes to operate your wells under a subcontractors operating agreement. The rate charged per active well per month will be made as a firm bid after an inspection of all properties by our field personnel. We will also require information to be submitted by you as to the number of working interest owners and whether or not oil and gas disbursements will be required of Ramsey. The specific details of our property management operations are delineated below.
1. ACTIVE WELL:
An active well is defined as an oil or gas well capable of producing, a saltwater disposal well, a water flood injection well, or a water flood supply well. We also include at certain times in the category of an active well, installations such as compressors or dehydrators, if they are necessary.
(a) Ramsey Property Management, LLC will receive all invoices for work performed on the leases during the specific month of billing. They will be approved by our production superintendent or his representative and paid by Ramsey.
(b) Ramsey Property Management, LLC will prepare a monthly joint interest billing. The joint interest billing will be mailed to all working interest owners. It will include all third party expenses paid by Ramsey during the month, including the pumpers wages, transportation and other costs. It will also include Ramsey's current overhead fee for the active wells for that month. Ramsey will be responsible for looking to each working interest owner for their respective payment. Should a working interest owner become seriously deficient in paying, Ramsey will look to the owner-client who signed the subcontractors agreement for payment.
(c) Ramsey Property Management, LLC will prepare any AFE and cost estimates for major projects such as drilling wells, installation of water floods, recompletions and major work-overs. They will be forwarded to you for approval. Included in the cost estimate will be the anticipated per diem field supervisor charges and any engineering charges necessary to complete the operation in the field. A copy of Ramsey's current rate schedule will be attached to this specific program. During the actual performance of the major project, bills will be received in our office, approved by Ramsey, and forwarded to you for your payment, unless arrangements for prepayment have been made.
3. ADMINISTRATIVE OVERHEAD FEE:
The overhead fee includes the first level of supervision. Ramsey's field production supervisor will be the direct supervisor of the pumper on location and will be responsible for making all minor repairs, pulling jobs, chemical treatments, etc. The pumper will work for and report directly to our supervisor.
4. PRODUCTION CLERICAL SERVICES:
Ramsey's production clerical staff prepare the production forms required by State and Federal agencies to change operators of the well. They process all pumpers gauges, field run tickets, etc. They receive the pipeline run statements and prepare all necessary forms for the Oklahoma Commissioners of the Land Office, Bureau of Land Management, Oklahoma Corporation Commission, Oklahoma Tax Commission and other State or Federal regulatory bodies. They will also contact oil or gas purchasers if runs are not credited properly, if prices are unusually low during one month, frac credit is not applied, or other production related problems are detected. Gas balancing statements by pipeline will be prepared for split-stream wells. State testing requirements will be scheduled and supplied to appropriate agencies. Ramsey will be responsible, if requested, for hiring necessary legal counsel to prepare NGPA Well Determination filing, if necessary. These will be prepared by an outside party with your approval and will be made available for your approval and submittal. The direct charges of the outside legal and/or professional consultants for these matters will be billed directly to you on the joint interest billing. If Ramsey's engineering staff can perform the service more economically, they will do so and charge accordingly. A computerized monthly production report will be mailed to our clients with their monthly joint billing statement, yearly to all other working interest owners with their January joint billing statement, and monthly to working interest owners if requested by these owners.
5. OFFICE SUPPLIES:
Ramsey will provide office supplies, stamps, telephone service, etc.
6. GENERAL MANAGEMENT:
Ramsey will handle correspondence and day-to-day telephone calls and operations problems.
7. FIELD EQUIPMENT INVENTORY:
Ramsey will initiate a field inventory of all surface and sub-surface equipment upon commencement of operation. This will be performed by an outside party and will be charged to the lease. We will maintain an equipment inventory in our files at all times. Transfer orders will be filled out and completed for transfers of equipment between leases and wells as necessary.
8. ANNUAL RATE ADJUSTMENT:
The beginning rate charged per active well per month will be adjusted on the first day of April as provided in the standard COPAS accounting form. This will be attached to the operating agreement. The adjustment will be computed in accordance with the "index of average weekly earnings of crude petroleum and gas production workers" as published by the U.S. Department of Labor Bureau of Labor Statistics.
The term of this contract will be a minimum of six months. At the end of that time it can be canceled by either party upon written notice of not less than thirty (30) days.