Replies to This Discussion

Permalink Reply by adubu on August 15, 2010 at 14:23

All NG wells (not just shale) price regardless of formation should be shared for the market does not what formation the NG came from when it is sold.

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Permalink Reply by adubu on August 15, 2010 at 15:25

GD---Only the transportation systems old vs new may have variabilties in transportation cost in pipeline due to construction cost today vs yesteryears and they are the only pipeline the operator has to transport their gas to market so they tell operator take it or leave it in the ground but the commodity is the same reguardless of age of well. NG is NG ( Yes BTU Factor increases value). crude oil is crude oil ( Yes some is lighter crude and has higher price but some old wells produce very sweet light crude) . They do not pay you any different at user site for the commodity from old vs new well. If what you say is true I'm calling my electrical company and tell them I'am purchasing only gas from their "old wells" Unless you are telling me the BTU factor is higher on the new shale wells vs the shallower sand wells. GD I do wish I had a portfolio of old hbp verticals but do not. Do have one nice Cotton Valley unit in east texas about 9 years in production of 20 acres. I am hoping for some day to have some shale wells in shelby county but I maybe on the edge only and may not get drilled with this market unless NG get back to $8 and holds

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Permalink Reply by adubu on August 15, 2010 at 15:48

GD---only way to know is to list and compare all--- Do you believe everything your operator tell you about prices??? If I ask that question they would tell me payment based on what they receive for the gas-- period. They do get bids from different brokers in the field at least on the one unit I am in they tell me, so yes I ask question to the royalty department also. No Tejas but save your confederate dollars for the South may rise again or maybe as our gov. Perry said we may spilt from the USA and become independence again :) LOL

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Permalink Reply by adubu on August 15, 2010 at 16:14

GD---I do not want old data ----who is talking about OLD DATA !!!!!!!!--- just the prices of CURRENT 2010 prices all royalty owners are paid-- just like I listed for current 3 months march- april -may of this year 2010 june not avaiable yet will be next week. You have to show me prices are different in same area for current gas from older wells or current prices for gas on new H wells I do not think you will see different prices from same gas units with shallow wells and new deep H wells with prices different for each. You have to show me that check stub.

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Permalink Reply by adubu on August 15, 2010 at 23:56

GD--if your OLD wells have long term FIXED price contracts for 10-15 years selling gas I agree that is not what Henry wants, but if the NG is sold month to month to brokers, pipeline,s affiliates, or who ever ---this is data I think every one wants to see comparing operators and locations in general with CURRENT gross prices each month that royalty owners are paid. I see no different in what formation or type of well as long as it is a NG well. Later he may will break down to look at all the deductions to get NET paid to owners. GD if one day I am lucky enough to have as may wells as you or even 30-40 I will have time and be happy to share some more data. I am on this site to learn day to day so I am less likely to get screwed again and also to get ideal of what's going on in the east texas-la area and info that may help with oil & gas stocks on the market that are involved in the play. Plus what's going on around the area that I have undrilled minerals.

Permalink Reply by Henry on August 15, 2010 at 23:22

GD,
Right now, I don't have enough data to "crunch."

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Permalink Reply by Chad E Ellis on August 16, 2010 at 1:59

adubu,

I'm afraid the market does make a distinction between gas sold at the wellhead. Most gas is marketed on a BTU basis. The higher the BTU the higher the price. Because of this, Haynesville Shale gas is sold at a discount to Cotton Valley produced gas. The gas is so different that several buyers of gas are requesting that their be a seperate gathering system developed for the Haynesville gas to keep it seperate from the "richer" gas. This is because Haynesville BTU's range in the 900 to 1000 range and the gas from some Cotton Valley fields have approached 1400+. The higher BTU gas has more NGL's that can be extracted in the refining process. All wells are regularly tested and the BTU information is entered into the sales meter for payment calculations. Condensate(oil) is sold the same way. Different gravity is sold at a different price. Each tank load is tested when it is sold. The prices you see on the widget to the left are based on "benchmark" grades or ideal BTU's.

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Permalink Reply by king john on August 16, 2010 at 3:03

wow, thanks chad, that post offers a lot of insight. i noticed the btu factor on my statements and was thinking that would or should have a bearing on the price. perhaps that should be included into the data set henry is collecting.
in regard to the wells being tested often, is there a lot of fluctuation in the btu factor ? also in condensate?
kj

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Permalink Reply by Chad E Ellis on August 16, 2010 at 8:46

Very little change after the initial frac. The only time a well changes is after a recompletion or a comingling with another zone. As for Henry's info, he needs to segregate the Haynesville from other zones to compare apples to apples. Gas is sold at the wellhead and is adjusted for BTU and specific gravity.

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Permalink Reply by king john on August 16, 2010 at 23:39

thanks chad. if there is no significant change in btu after intial frac, why so much testing?
kj

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Permalink Reply by Les Bamburg on August 17, 2010 at 3:06

KJ, are you referring to flow testing or gross heating value (Btu)?

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Permalink Reply by king john on August 17, 2010 at 3:24

les, i am referring to chads comment "All wells are regularly tested and the BTU information is entered into the sales meter for payment calculations" so i am asking why the btu ratio must be calculated so often if there is no significant change ? thanks,
kj

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