Why does the Gross Volume shown on the Quarterly Payout Statement differ from what Sonris shows as reported to the State?  Since the start of production of this well Chesapeake has shown on the quarterly statements 89,287 more volume than what is represented on the Sonris report.  In dollar figures it represents about $252,346.

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I will take a stab at answering this. While questioning CHK taking deductions from my royalty check, I was told that they reduce the gross volume accordingly to the amt. they want to charge you for fees such as transport, and etc. and you are actually paid on the net volume.

I questioned this because I wanted to be able to deduct the fees from my taxes and I was told that I could not claim the fees as deductions. My pay was based on the net volume.

I hope this is at least related to what you are asking, about the time I think I understand this company, I am lost all over again.

There's no telling why this is occurring on your well in reality, but in theory this reflects that some of the gas actually produced (reported on SONRIS) was not actually sold (what is reported on your check). This could be due to flaring (unlikely in the Haynesville except for immediately after completion); from "unavoidable waste or leakage," which probably occurs when gas is lost during dehydration, fractionation, compression, etc.; or, most likely, gas that the operator takes for free to power the surface equipment such as compressors.

There is a very common but widely overlooked clause in most gas leases that the lessee is entitled to take produced gas for free if it uses the gas for lease operations. Usually the free gas used for operations is nominal, and no one gets too bent out of shape over it, but this can be another way for unscrupulous operators to nickel and dime royalty owners without any accountability for how much gas they used and for what purposes.

Those pesky "unscrupulous operators" can be assigned at whim in the state of Louisiana. But of course, the operator you sign with is a fine and upstanding industry representative and would never assign to anyone but a corporation of equal integrity. Now, sign that lease agreement and forget about it. How about those Saints? Go Tigers!

I should have stated that I am an UMO.  The well has another $590,000 to go before it is paid-off; from a starting balance of $8.2 million.

Good for you. Stay on them, there should be more so inclined.

It could be that CHK reports to Working Interest Owners (which you are as an UMO) at the OK state pressure base of 14.65 psi. It will file reports to SONRIS at the LA pressure base of 15.025 psi. Thus, volumes at 14.65 psi will be larger (less pressure) than volumes at 15.025 psi (higher pressure).

CHK does the same thing on its Royalty Statements where volumes generally (but not always) are reported at the OK 14.65 psi rather than the SONRIS 15.025 psi. Why CHK reports LA NG volumes on LA wells at the OK pressure base confounds me other than to spread confusion among anyone trying to get at the truth about CHK and its sham bookkeeping transactions with CEMI and its overcharging of gathering and treating expenses by its formerly affiliated midstream company (CHKM and now Access).

To convert OK volume to SONRIS volume, multiply by .975. To convert SONRIS volume to OK volume, multiply by 1.0256. 

It's not unusual for Texas companies in my area of Louisiana to use the Texas Standard (same as Oklahoma).To adjust to 15.025 PSI (La. Standard) from 14.65 (Texas Standard) divide the volume by 1.020027 to get actual volume. Best to personally read the Barton Recorded - (as opposed to a EFM) and use the following formula  GR = (square roof of Differential * static temp) X MF.  MF corrections include temp, gas gravity, pipe inside diameter, orifice size and other corrections. Deductions are calculated using MCFs instead of MMBtus, but MMBTUs can be converted using the BTU factor of 1.090.  Multiply that number by your owner MCF of 98.44, total is 107.2996 which is the owner ded taking in consideration rounding of the BTU factor. To arrive at the percentage deducted add the owner ded and divided by the owner rev percentage. As you will see, if the gas is wet, the price is higher!!!

What you should be, I mean really be watching is how much gas is being reported to the dang state revenuers - for severance tax purposes.  In Louisiana, it has to be reported using the Louisiana standard.   Regardless of how sketchy the check stub info is, in the worst case you can easily convert the net $s deducted for severance taxes to gross production in MCF for the unit.  Falsification of reports to the Dept of Revenue (and to the conservation, for that matter)  can lead to 2 years, more or less, of state prison time.

Generally the bigest problem relative to disparities between check stub or payout volumes and the volumes reported to conservation is:  due to gas used at the site to run equipment (which can be humongous if compressors are involved or if there's gas cap injection. Unfortunately, there are not presently industry standards as to how this is done, but should be. Companies are all over the place as to their check stubs, but seem to be remarkably uniform when it comes to severance taxes, and how they report that.

Harold5011--- there is no universial conversion factor on # BTU to volume of Nat Gas it all depends on Quality of the gas.

Natural gas can range between 800 to 1200 btu's per cubic foot. That's why btu content is measured at the wellsite. Here's a Universal mcf to btu converter --- obviously for pipeline quality gas: 


What's the difference?  


Louisiana severance taxes are based on MCF, regardless of btu.

Harold, you hit the nail on the head.

Tommy -- Gross volume is what producted from well before any usage of gas to run compressors, etc for working of well on lease site( as Andrewa discussed above) then remaining volume of gas goes into pipeline which is volume that royalty is calculated from.( depending on your lease Royalty free or cost deductions to get it to market as it enters pipeline near well) Usual several thousands of mcf used each month on lease site. I don't know how La reports it on Sonris but in Texas RRC site each month there are itemized the amount produce gross and amount from different things there are 9 codes for disposition both oil and Nat Gas. If you go to the Texas RRC site and enter in search Disposition codes it will download a table that tell you what each code is for.The Link below will direct you there. You can Then go to GIS Map and click icon of well and look at production it will show details of disp[ostion each month of production--- if you need help with Texas RRC site ask jffree1 member of GHS she is the Expert on the RRC -- try this link--- Hope this helps you have understanding site.http://www.rrc.state.tx.us/forms/forms/og/pdf/FormPR-Instructions-F...

You said the majic word, "Chesapeake" what they do is cheat, hide and steal. What ever it takes they will do it. 


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