for the production month of april, devon paid me $3.68 mcf from one well and $3.56 mcf from another well. what is remarkable is these two wells are in the same unit and the gas was sold on the same day. the wells are in shelby county.
Think I would send email to royalty division of Devon ID your owner number, well and unit numbers and ask that question. It may have a lot to do with different contracts with broker of sales of different wells. Some pay day rates and some pay at fixed monthly rates, gas may flow into different pipelines to different transmission lines, etc can be varible reasons. They must explain if you ask them. In your lease are you to receive royalty free gas or do you pay for cost to get it to market and receive only net. ( another reason is Obama may have taken a cut out of your gas Kj--LOL)
adubu, i am making an attempt to compare what devon is paying across the board. i know how the operation works. thanks though. i would simply like a comparison from some other royalty owners in some other counties, to some other state (LA.) i doubt if devon would be willing to do that.
and YEA, the administration/IRS got their hand pretty deep in my back pocket this last year...lol
Kj-- understand and I know you probaly know that the prices will vary depending on location of unit due to transportation cost. Wells in La. pay more than East Texas due to fact La. closer to Henry Hub. Good reason to have royalty free gas clause in your lease although sometime difficult to get in lease due to cost to prepare and get gas to market getting higher and higher these days. Let me know what you find would be interesting to see.
Devon tends to set their market price tied to the Houston Ship Channel price rather than via the Henry Hub. Seems to make sense as the E.Tx production is actually closer to Houston rather than the Henry Hub in Eunice,LA.
Kj--D. Gaar--Correct me if I am wrong, but most gas from east texas still goes to henry hub storage with some contract simply tied to houston ship channel prices as index for broker pricing of NG purchase. Also when you talk about how you are paid your royalty if it's royalty free gas then you should be getting the price at storage when delivered 100% gross not well head price. The operator gets well head price because they have to pay all the cost to prepare and transport the gas to market out of the price at the henry hub.
Currently we are only leased with Devon, but not yet in a producing unit. So do not have first hand knowledge of what the statements are tied to.
Would be interesting to hear from KJ or others whether the prices received have been actually pinned to HH or HSC?
I know for our contract addendum they agreed to royalty free gas when we pushed. To protect against any preferred prices sales to any subsidiaries, we also added an additional clause to make sure that sales price was at "arms-length" market rates. Our original wording for that clause had the market rates defined as pinned to Henry Hub. Devon's legal dept came back and approved the clause but insisted that the definition of the market rate for E.Tx gas be pinned to Houston Ship Channel rather than HH.
it really seems like such a simple question.
adubu, are you saying the price reflected on your check has been adjusted to account for treating and transportation? on my devon lease, i pay for that , but it is listed as a deduction.
it doesnt matter to me where the gas is marketed. i am not asking for anyones total or social security number. just simply trying to get an idea for the average across the play. no one has yet responded, so i assume no one in this group is recieving royalty yet and i hope that changes soon. lol
kj-- I am in two leases producing in east texas --one lease I have royalty free gas in my lease the only deductions is severence tax from the price and the other lease doesnot have that clause (older lease before I knew to negotiate) I receive all deductions ( my % interest based on my net % royalty interest calculation in the unit)including everything to get the gas to market including everything to treat the gas and to transport it in pipeline plus severence tax. Different in two leases is about 50 cent per mcf in net price. On my pay sheet it show what those deduction cost to operator's gross price but on the royalty free lease this are not deduc from my payment.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More