Gas price variations - Simsboro Field
I currently receive relatively small royalty payments from Chesapeake/Indigo on four producing wells in the same unit (Sec. 1, T17N, R4W). Some of these wells have been in production for app. 50 years while others are more recent.
All royalties are based on the original lease agreement negotiated in the 1950's.
I've noticed on my royalty statement for several years that the price paid for gas on two of the wells has run approximately twice the amount paid on the other two wells consistently statement after statement.
What factors could cause this difference?
Another question concerns the tax rate applied to production from these four different wells - no two rates are ever the same.
Queries concerning these two concerns have been made in the past to Chesapeake's corporate offices in Oklahoma and after having been forwarded to several different individuals, no reasonable explanation has been given.
Has anyone else had similar problems?
All royalties are based on the original lease agreement negotiated in the 1950's.
I've noticed on my royalty statement for several years that the price paid for gas on two of the wells has run approximately twice the amount paid on the other two wells consistently statement after statement.
What factors could cause this difference?
Another question concerns the tax rate applied to production from these four different wells - no two rates are ever the same.
Queries concerning these two concerns have been made in the past to Chesapeake's corporate offices in Oklahoma and after having been forwarded to several different individuals, no reasonable explanation has been given.
Has anyone else had similar problems?
Views: 30
Replies to This Discussion
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Permalink Reply by BirdDawg, plain ole' idiot on
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Bump.
I am looking forward to some answers also. Interesting questions.
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Permalink Reply by Catfish on
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It be my luck they would discover they were paying me too much on the two paying the most. It sounds like poor accounting especialy the tax part. I hope Rosebud finds out they been shorting her.
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Permalink Reply by Rosebud on
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Well, you two are a lot of help! LOL! We've called Chesapeake at least two or three times and nobody had an explanation - they'd just pass us from one person to another. Then, the last check came from Indigo.
It just doesn't make sense.
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Permalink Reply by Skip Peel - Mineral Consultant on -
Chesapeake sold non-haynesville producing properties to Indigo a month or so back. There should be a press release to that affect on the CHK website.
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Permalink Reply by Rosebud on
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Right, I know about that. All the royalty statements until the last one were from Chesapeake, the last one was from Indigo. We've been contacting Chesapeake off and on for probably 18 months.
What I'm asking is why four different wells in the same unit don't have the same price paid for the gas AND why the tax rates vary?
When we've called Chesapeake, one person would say they didn't know but they'd have someone call us who did. Then days or weeks later that person would call, only to say they didn't know but someone else would and they'd call us. LOL!
Oh, and forget about Emailing Chesapeake - those inquiries never got any replies.
I know my royalty statement isn't a fluke, my brother and sister receive the exact same royalty checks I do and identical statements.
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Permalink Reply by The_Baron on
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Tax rates:
1. Gas Full Rate STATUTORY CITATION: R.S. 47:633(9)(a)
The adjusted severance gas full rate is:
from July 1, 2008, through June 30, 2009, was 28.8 cents per MCF,
from July 1, 2009, through June 30, 2010, is 33.1 cents per MCF.For previous year tax rate see Historical Severance Gas Tax Rates page.
2. Incapable Oil Well Gas STATUTORY CITATION: R.S. 47:633(9)(b)
3 cents per MCF for gas produced from an oil well, which has a wellhead
pressure of fifty pounds per square inch gauge or less under operating
conditions. To qualify for the reduced rate an oil well must have a casinghead
pressure of fifty pounds or less per square inch for the entire taxable
month.
3. Incapable Gas Well Gas STATUTORY CITATION: R.S. 47:633(9)(c)
1-3/10 cents per MCF for gas produced from a gas well, which is incapable
of producing an average of 250,000 cubic feet of gas per day. To
qualify for the reduced rate a gas well must be incapable of producing
250,000 cubic feet of gas per day during the entire taxable month.
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Permalink Reply by The_Baron on
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The older wells could be incapable wells. New horz. wells should qualify for the severance tax relief program.
Quality of gas will have a HUGE impact on price.
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Permalink Reply by Rosebud on
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Hi Baron,
Thank you so much for all this information - I have an idea this might be the answer if we can sit down and figure out or find out more information from our statements.
Ann
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Permalink Reply by Checkmateking on
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"Another question concerns the tax rate applied to production from these four different wells - no two rates are ever the same."
aren't severance rates progressive?
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Permalink Reply by Checkmateking on
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Thanks Baron
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