landowner

Royalty Payment for December only .09 more than November, Anyone have any idea why?

I've just recieved my royalty check for december and I'm puzzled that the price only increased .09 cents. The price of gas for the month of december was notably higher than november.  Can someone tell me why such a small increase to the land owner. this is a chk well. thanks

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landownerPermalink Reply by skipcrawford on March 2, 2010 at 15:10
has anyone had same experience
Permalink Reply by Muddigger on March 2, 2010 at 18:51
Take the Cadillac back. Unless they bring another well on in your section there will possibly be a decline in production monthly. See these wells come on with a high pressure and produce a large amount of gas. But every minute the pressure is declining and the amount of gas being produced is declining. You just hope for a long life span. I have noticed that some of these wells settle in between 4000 and 8000 MCFD.
Permalink Reply by Susie Brown on March 8, 2010 at 14:04
Hmmmmmmm Muddigger, you sound like some of those out of staters gas workers moving in here who want to buy our land with our minerals. When you can't get the minerals, you belittle the value of the minerals that we have.

landownerPermalink Reply by JAMES SMITH on May 24, 2011 at 16:56

Muddigger,

Would like to talk to you more about what you are seeing wells settling at for the future. Sec19 14-14 and Sec 18 14-14


landownerPermalink Reply by LP on March 3, 2010 at 3:43
I think Skipcrawford was asking about the wellhead price of natural gas for December 09 rather than the amount of gas produced and sold. Correct me if I'm wrong.
I wondered about this also. The Henry Hub price for NG through December was above $5.00. The EIA reports NG was $4.31($ per MMBtu) for December.
See: http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp
My royalty check (from CHK) shows they sold the gas for $3.67 for December 09.
Makes me wonder too.

Oil & Gas ProPermalink Reply by The_Baron on March 3, 2010 at 4:08
The price of gas will vary depending on where the well is, and who the operator sells to. If the area only has limited sales lines the price for your gas will be substantially lower. Also I am seeing some HA wells have a lower btu rating which also reduces the price.

landownerPermalink Reply by skipcrawford on March 3, 2010 at 8:53
thanks for the input . this well is phillips #1 in sec 1 14n 15w the price for dec was 3.273 the btu was at 992
Permalink Reply by hogeyes on March 4, 2010 at 4:08
Baron,

1) Can you explain why the sales price is affected by # of sales lines? Is it because there are limited buyers? I received my first HA royalty check 3/1/10 for production for 10,11,12/09. December was $4.35. i received another royalty check from older vertical well production and December sale price was $7? Such a large variance - trying to get better idea of how these sales are transacted. The HA operator told me that they have 6 buyers for the 2 HA wells so it seems unlikely that there is not enough competition to keep price reasonable. Could it also be the actaul day of the month that sale is transacted. I noticed that on all my checks it only shows the month of transaction and not actual day of the month.
2) Can you speak to "HA wells have a lower btu rating." Is this basically like an octane rating for pump gasoline? What is considered good btu rating and is there a way of finding out what my wells are putting out in that regard?

Thanks, Hogeyes

landownerPermalink Reply by adubu on March 4, 2010 at 16:32
if La. is similar to Texas the price of NG is variable to the contract with the middleman (Broker) and is usually based on the Henry Hub price at the 1st week of each month and is set for that month gas production.Then price net is dependent on other varible--location of well, field, Btu factor, compression cost, pipeline cost, etc. I seen gas at different prices in same field and unit all dependent on different contract signed with different brokers. NG in La. is general higher net than Texas because La. closer to Henry Hub collection storage and transportation cost less.
Permalink Reply by hogeyes on March 5, 2010 at 5:30
Adubu, thanks for info. Are you saying that the operator sells to a broker who then sells to a final buyer? Or is the broker and buyer same person/company? Also, if contract price is based on first week Henry Hub price, either party can benefit or suffer if the price spikes/dips substantially within that month?

landownerPermalink Reply by adubu on March 6, 2010 at 7:29
broker bid for gas with operator is what I understand from explanation I received from company on some of my royalty payments that varied. The price was either set at Henry Hub or Houston Ship Channel price 1st business day of month for that months gas. So if price increases during month you lose out but if prices fall you win some then like hedge for that month then reset price next month is the way I understand it. Your operator should have royalty phone # suggest call them to explain there price payment also you price could be higher or lower depending on your leased signed if you receive wellhead price or pay your part of preparing and transport fees,etc

landownerPermalink Reply by Henry on May 24, 2011 at 23:14

LP,

Do you mean Dec 10?

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