Replies to This Discussion

Permalink Reply by Les Bamburg on October 31, 2011 at 8:11

Bob, the gas sales price into the pipeline in East Texas will be a some difference (basis) to the NYMEX gas futures price each month.  There may be further wellhead deductions depending on your lease agreement.

 

The daily cash prices or NYMEX futures price shown on Google or Bloomberg do not really mean much for your price.  The majority of natural gas is sold on a monthly baseload basis rather than a daily swing basis.  So check the final NYMEX expiration price for the contract 3 business days before the end of the prior month.  For example the November NYMEX contract expired on 10/27 at a value of $3.524/MMBtu.  East Texas pipeline prices will be ~ 10-12 cents below this value.     

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Permalink Reply by Love Horizontals on March 23, 2012 at 15:34

When purchaser buys gas, who is paying transportion cost - buyer or producer?   

Also according to recent supreme court caseShell Oil Company v Ross  court held that price Shell was receiving on natural gas was of public record readily available to the Royalty Owner and the Royalty Owner could have known Shell was not paying royalty based upon what it was actually receiving for the gas.  I have looked extensively and cannot find public information on the price oil companies are receiving for natural gas from individual wells or within fields.  Anyone know a source?

 

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Permalink Reply by Les Bamburg on March 24, 2012 at 4:03

LH, it depends on the point of sale between producer and buyer.  For example if buyer purchases at a an index point the producer would pay any transportation costs to deliver the gas to that point.  If the sales point is upstream of the index point then buyer would incur the transportation cost from the sales point to index point and would pay a lower price to cover the transportation cost.

 

The judge partially erred in the ruling because natural gas index prices are not publicly available but can be obtained through a subscription service.  There was information available for the lease well gas prices that could have been used for comparison.  

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Permalink Reply by Bob Cratchet on October 31, 2011 at 8:15

Thanks Les.  I figured there would be a difference.  I was just wondering if their was a way to keep up with the east tx pipeline price daily or just look once a month when the NYMEX contract expires.

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Permalink Reply by Bob Cratchet on October 31, 2011 at 8:20

Please bare with me..................the Bloomberg Price says $3.93 right now.  But since most natural gas is sold on a monthly baseload basis, that price doesn't mean much.  How do they determine the monthly baseload basis?  Maybe an average of the daily price for 30 days??

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Permalink Reply by The_Baron on October 31, 2011 at 8:47

the price you see is the futures market price based on a set delivery point. contracts are set at the end of each month.

 

For example, they are not trading todays price today, they are trading prices for gas delivered in December at the henry hub. The price you recive in dec will be set in about three weeks, with the actual price you recive being below the henry hub price since you wil lbe selling to a middleman..  your location and final market are big factors, as is your operator as they are making contracts to sell their gas.

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Permalink Reply by Les Bamburg on October 31, 2011 at 8:58

Bob, the $3.93 is for the December NYMEX contract and will change continuously until its expiration near the end of November. That is the only important value.

 

Unfortunately there is no public source for the monthly pipeline index prices so you just have to use the adjustment to the NYMEX closing price as an approximation. 

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Permalink Reply by Krkyoldhag on November 1, 2011 at 4:42

The site itself has a price for NG and oil on left hand top of the site home screen..it changes all day long.  According to Les  the price for month on NYMEX is figured on end of month figure..that could mean that price for October will be $3.93 even tho it has just dropped again this morning.

 

It has gone from a high of about $4.27 in July (before the budget fight) down to $3.47   now its  back up to $3.93..as of Friday.

I keep wondering how we will ever become energy independent if the companies continue to sell to foreign companies (re: the Petrohawk deal and the leases in Arkansas)  And if only BP is allowed to drill in Alaska and the Gulf.

Is Washington trying to destroy the USA oil and gas industry or just break it so it can be nationalized for Obama?

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Permalink Reply by The_Baron on November 1, 2011 at 4:58

Lets be fair. BP is not the only deep water operator in the gulf.

 

In March 2011 Shell got the go-ahead for a supplemental exploration plan for its Auger Field property, and Exxon Mobil got approval to drill a new well in its Hadrian North project in the Keathley Canyon Block, located in nearly 7,000 feet of water, 240 miles offshore Louisiana. That month the government also gave permission for Noble Energy, BHP Billiton, ATP Oil and Gas, and Chevron to resume drilling at previously permitted wells.

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Permalink Reply by Krkyoldhag on November 1, 2011 at 6:14

How many of these are US owned?  BHP isn't is it?

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Permalink Reply by The_Baron on November 1, 2011 at 7:47

I would answer that by ssaying that there is a big difference between US owned and US based.

 

More importantly, as the Deep horizon taught us, there are many companies involved, not just the one with the name on the permit.

 

I drive a "foreign car", but its built here in the US. My father in law drives a "domestic car" but his is built in Mexico. How many shareholders of BHP are americans? some of the largest shareholders are american companies and funds. Lets just be glad someone is producing american energy.

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Permalink Reply by Les Bamburg on November 1, 2011 at 8:02

KOH, just for information BHP's head of Production is an American (ex-Mobil).

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