Replies to This Discussion

Permalink Reply by Snake Stewart on July 27, 2008 at 8:27

Out of order on my part , Randy.Its been a long couple of weeks.

Permalink Reply by insomniacnla on July 27, 2008 at 8:28

Hey Snake!

I hope that you and your family have all been doing well. I can say that Randy is not trying to pull one over about the wellhead price of gas. We will not receive the price of NG that is reported on in the newspaper. The wellhead price is what the o/g company sold the gas for without any deductions for transportation, pipeline fees, etc. It is a much differ and lower price than the price the NG is actually traded for on the stock exchange. On this one, he is correct but I wish we received the higher price.

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Permalink Reply by Snake Stewart on July 27, 2008 at 8:35

Thanks , I have already recended my ugly comment and apologized to my little Shale friend Randy.Its just that he hasn't been talking to me lately , I guess I felt left out and thats why I reacted the way that I did. I offered last week to feed Scott from OKLA and Randy's families for goodness sakes. What more could a fella' ask for ? 75 % and no most favored nation clauses huh! HA!HA! Just kidin' Randy.

Permalink Reply by Les Bamburg on July 27, 2008 at 15:10

SS, I think his reference is to "initial rates" getting better as you drill more wells. It is doubtful though that future wells will be completed with 11 frac stages so to get 15 MMcfd with 5-6 stages would be the target. There is a lot of information available on the decline rates in other shale plays and tight sandstone reservoirs.

You totally lost me with the supervisor comment.

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Permalink Reply by Les Bamburg on July 27, 2008 at 5:52

Cooper, there is no minimum percentage leasing required but a unit would probably not get approved with less than 50% leased. You do not get "royalties" if you are unleased. Royalties are only paid to owners with lease agreements. An unleased mineral owner becomes a "carried" working interest owner in any wells drilled in the unit. The well operator will retain your share of the production (revenue) to pay for your share of well and operating costs. After reaching pay-out you would receive your share of revenue less operating expenses. This is not the same as royalty as royalty does not have any expenses or costs deducted from revenue.

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Permalink Reply by Snake Stewart on July 27, 2008 at 8:23

Royalty doesn't have any expenses or costs deducted from revenue ?

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Permalink Reply by insomniacnla on July 27, 2008 at 8:38

Not if you get a "no deductions clause" in your lease.

Your nice comment back to Randy was funny.

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Permalink Reply by Snake Stewart on July 27, 2008 at 9:25

That was were I was headed with that . Any time O&G's have the opportunity to gouge they will. Thats just what they do in the name of good business practice. The fewer places that they have for indiscretion the better off the landowner will be.

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