Bacon,
Do you receive similar prices from QEP and CHK?
Ok, so I'm looking at the production / statements for June '11. QEP pays $4.42 (MMBTU, BTU Factor 1.00) CHK is paying $3.339 for the same well. CHK statement has no details about BTU factor and such but they are supposed to pay 50% and the RI is the same on both companies statements, 50/50. I suspect we'll just get the attorney involved from the start and will keep you posted.
Its my understanding it takes some time to get a refund from LDR.
Bill, depending upon Petrohawk's ownership in the unit it may not be worth them marketing their share of gas production even if Chesapeake's sales price is lower. It is possible Petrohawk has only a small amount of acreage leased in the section (unit).
Also, another problem with Chesapeake is the method they utilize for calculating royalty. It appears the sales price shown on their royalty statements includes deductions resulting in a price that is much lower than the actual sales price Chesapeake is receiving for the natural gas. Chesapeake must be handling the royalty payments for Petrohawk's share of production in the unit and applying their methodology.
Sorry I did not see your earlier post.
Checks from Shell and Encana have shown a variation in price between the 2 of them for the same well. Shell is the operator and Encana is the non-op. One mo is a .05 cent difference another month a .09 cent difference, Shell paying the higher amount in the 2 months I compared.
My question is, I noticed previous checks from Encana and all checks from Shell list one price, the Royalty Interest price. The last check from Encana included the RI price and an additional line titled MMBTU Price, which was a whopping .18 cents more than the Royalty Interest price! Should I assume the MMBTU Price is the retail price? Is something odd about the difference between the two?
Can anyone shed alight on the new 'MMBTU price' on the check and why it is now on Encana's check? What does this price mean to me? Is it retail and is it now on the check for transparency of RI price vs retail?
Thank you
VSC, most prices posted on royalty statements are quoted in $ per Mcf (thousand cubic feet). The MMBtu price would be in $ per million Btu.
The difference between the two could be reflective of one or both of the following items:
1) The gross heating value of the gas (ie Btu per cubic feet). Example - a GHV of 952 Btu/Cf would convert a price of $3.78/MMBtu to $3.60/Mcf.
2) Deductions for services that would reduce the (field) gas sales price for calculating royalty.
The location of the MMBtu price would not be retail (consumer) but could be at the delivery point into the interstate pipeline system.
If you post the gross heating value (Btu) from the statement it would help in the analysis along with the MMBtu price and RI price.
Gross value = 418621.20
BTU Factor = 0.957
RI Price = 4.07
WH MMBTU = 95503.00
MMBTU Price = 4.250
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