Replies to This Discussion

Permalink Reply by HBP on September 8, 2012 at 9:40

Which operator?

Prices aren't shown on Sonris, so I assume you mean the volumes don't match.  Some operators use payment systems that pay on an odd volume number, but then they overweight a "paid interest decimal" to get your gross payment before deductions.

If they are using a different "paid interest" decimal, you can check it with Sonris by taking your gross payment before deductions and divide it by your actual interest decimal (the decimal on your Division Order), then divide by the price they paid and see if that gets close to Sonris.  There may be two prices shown on the stub, one is adjusted for BTU quality.

Re: price, you will have to post what the price was and which month to evaluate if it was correct. 

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Permalink Reply by Glenda Simmons on September 8, 2012 at 11:22

Thanks for responding to my question. 

I use the eia (U.S. Energy Information Administration) site below for gas prices.

http://www.eia.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm

My decimal interest has remained the same on all check stubs.  I have done the calculation you describe. 

Please see the example below.

Month	Sonris production	Oil Co Production	eia Gas Price	Oil Co. Gas Prices
2/1/2012	93452	61183	$                   2.46	$                     3.81
4/1/2012	74476	48760	$                   1.89	$                     3.05

The production volume and gas price, factored in with my decimal interest, result in nearly the same royalty dollar amount.  But, I don’t understand why the company’s uses different production volumes and different gas prices than Sonris which is the national reporting site for Department of Natural resources.

 Again, thank you

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Permalink Reply by HBP on September 9, 2012 at 4:19

I agree.  I don't prefer when they change different numbers in the basic equation for landowners than what they report to the state.  I see about 11 different operators checks each month for clients I manage.  7 of those are Haynesville operators and only 3 use a basic method of volume reported x price x interest = gross.  They rest you have to work the numbers to confirm they paid correctly on volume reported and price. 

In your situation it looks like they are overweighting price (instead of a paid interest decimal) to get to the same point.  The two months you provided work out to be very close on the gross (and it sounds like you did that math too).  

My opinion on this issue: Let them make it as complicated as they want in-house, but when the statement goes out to the royalty owner, it should be simple to calculate gross before any deductions.  But it probably won't change.

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Permalink Reply by Glenda Simmons on September 9, 2012 at 9:01

Thank you, very much, for the information.   Perhaps this is a rather common practice in the oil and gas industry.  However, it is puzzling.

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