I have unleased land in Haynesville Shale, but also have leased land in Barnett Shale. Received first royalty check this week on 6 wells. Three of the wells started production in January and the other three started production in March. In the Barnett Shale 6-7 months after production is typical for the first check. We are leased with EOG.
Linda, I think Po boy is assuming that no one has been paid a royalty because no HS has made it to market. There is limited production, but has it been sold?? I don't know . "others" that he speaks of I assume are the older plays, LCV, Barnett, and whatever in in production in marketable quantity.
Big: natural gas cannot be "stored" like oil so when its produced it has to go into a pipeline. There has been HS production sold so royalty payments are being accumalated. Maybe checks haven't made it but they will be soon. The accounting can take up to 2 or 3 months or more but since there is production over the last several months, there is sales of HS gas and those payments will be coming for those with wells/units that are on production.
Natural gas is stored under ground during summer and then sold in winter at a better price. I believe that they were trying to get further o.k.'s to use salt domes as storage facilities but was shot down in legislature.
However, a company cannot put gas in storage without paying royalties. Plus, the storage caverns are not used by individual producing companies. They do not do that. Any gas flowing from HS wells is being sold to marketing companies, thus triggering a royalty payment. In fact, they don't have to sell it to a 3rd party to trigger that. And the marketing companies may put it in storage but that's a whole different kettle of fish.
Yes, it is stored on a COMMERCIAL basis but not as a production option. See my post above for my further discussion. But producers do not store gas; it is commercially too risky for them to do it. AND more importantly, they would still have to pay you a royalty on it when they put it into storage. All of these storage facilities are owned by 3rd parties/mid-streamers. They aren't owned by the CHK's, HK's, XTO's of this world.
Gatrpaw u boys play nice.... LOL I said in my post "assume" as I assume no HS has made it to market, in quantity. I don't know. However I would surmise that the O&G did'nt just release gas or condensate into the atmosphere to come up with the numbers they come up with. How do they transport what they have, ie.15mmcf per day? Without a pipeline this would be difficult. What do they do?
Okay, I made a statement that is incorrect if you ignore the ENTIRE CONTEXT of the discussion. Sorry Gatrpaw, Centerpoint is not a producer but yes, they store gas underground. So does Goldman Sachs via their commercial contracts/hedging. But they don't operate production wells.
My comment was around the general discussion of whether gas was being sold from the Haynesville. I made the leap of faith that those reading the post would understand the context...well operators produce gas to pipeline or they shut the wells in. They do not "store" the gas as can be done with oil in stock tanks. And just so you don't jump on this, yes, it can be flared but only for limited periods of time with the proper permits. But CHK, HK, etc. do not "store" gas and that was the basis of my "gas cannot be stored" post. Sorry I wasn't clear. I assumed the folks reading the post would understand the context. Guess I was wrong. Too many years in the business so I gave everyone the benefit of the doubt.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More