Churn, listen to adubu. There are all sorts of things like where the gas is sold into the market, what sort of treatment is needed before being marketable, etc... and I know our gas is sold below Henry Hub and probably a little below Carthage. Some operators use Houston Ship Channel price. Just lots of variables that would make it different from whichever price you are comparing to. I quit watching the spot price when it hit $2 so I'm no help.
Churn and I signed the same lease and we have "free gas" negotiated. In fact, there are no deductions listed on the check stub so all is correct there. I wonder if they are selling to an owned or friendly intermediary at artificially low prices only to remarket in the new entity and pocket the arbitrage
My lease states that I will not be responsible for any production costs. Now if that means Royalty Free Gas, your point is correct. But this morning when I read adubu and jffreel's comments, I was thinking that Royalty Free Gas wasn't the same thing. Maybe they can clarify this for us. The PRICE listed on the check stub is the amount that I was questioning. And apparently I've been listening to the wrong quotes for Natural Gas prices. You know they are going to get us one way or another. And again, it's "pennies from heaven". I never expected to see a dime.
I just talked on the phone with Chesapeake. They say that the "price" of the gas that is listed on the check stub is determined by the quality of the gas, the distance that it has to travel in the pipeline to the sale point, and the purchaser of the gas. They said that production costs refers to the cost to acutally get the gas to the wellhead. So, the drilling and all that, I assume. She also told me specifically that every lease in the unit is not worded the same and does not have the same terms of agreement. She did not know what "Royalty Free Gas" was. She referred to the information that she had, put me on hold, and still could not find that term. Hope this helps. Jffreel and Adubu, please correct me if I'm wrong or am missing something. And thanks for all you help.
Shale drilling and lithium extraction are seemingly distinct activities, but there is a growing connection between the two as the world moves towards cleaner energy solutions. While shale drilling primarily targets…
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AboutAs 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 |
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