Replies to This Discussion

Permalink Reply by Jeff on August 14, 2010 at 13:00

The prices I posted were before deductions.

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Permalink Reply by Henry on August 18, 2010 at 0:46

Jeff,
I want to make sure I understand... the numbers here.. Are these gross? Would you mind telling me the net amount, that went into your pocket, after all the deductions?

And, if what you gave me were the net numbers, can you back out the gross value?

In order to do apples to apples (I'm trying), I need everyone's gross and net amounts.

Thanks,
henry

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Permalink Reply by Henry on August 15, 2010 at 5:05

Here is my second posting of results. Thanks to all who have provided me data. I am showing only data for 3 months this time, because data for the prior months is sparse. I have five reports from Chesapeake landowners, and it does not look good for them. One Chesapeake landowner (#18) received much higher prices than all the others. This landowner confirmed that his lease had a clause preventing low-price sales to affiliated or related entities.

To all who have not contributed.... please do so.

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Permalink Reply by Les Bamburg on August 15, 2010 at 7:00

Henry, is there any way to include additional information such as field name, section-township-range and offtake pipeline name?

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Permalink Reply by Henry on August 15, 2010 at 7:05

Les B,
There is the possibility to include it for some. I will re-do the info, and include field name and S-T-R for those who publicly posted their info. I will say that my Chesapeake data came from four different fields, and the data from the others came from about 8 different fields. I may not get an expanded result out today, but I'll do it soon.

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Permalink Reply by Henry on August 15, 2010 at 14:17

Les,
I've included the field for the ones where I have it. I did not want to do S-T-R because some landowners don't want that reported. You understand the takeoff pipeline much better than I. Maybe you can make some sense of this, with the information of fields. If you absolutely must have S-T-R, let me know, and I'll go back and see who doesn't mind having their S-T-R posted.

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Permalink Reply by w.r. frank on August 16, 2010 at 8:45

Henry,

Great job! Useful information. Hopefully, you will continue to receive additional data from more fields and more operators.

Thanks very much!

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Permalink Reply by Les Bamburg on August 16, 2010 at 10:45

Henry, having the field name was beneficial. In general the prices seem to be in the right zip code but it is very challenging given all the variables. Here are a few comments and suggestions.

- The information provided should include the "Btu Factor". Because the price shown is a $/Mcf the Btu factor is necessary to generate a $/MMBtu price and avoid issues with different gross heating values (Btu content).

- Most of the gas in this area is transported on unregulated gathering systems to downstream pipelines and so is difficult to assess the gas transport rates. Also much of the gas is delivered to gas pipelines (LIG, Gulf South, etc) that do not have published index price information.

- It is unclear if some operators may be including deducts in calculating the gas price while other operators show separately.

- Chesapeake's lowest prices in Louisiana are in the Logansport Field and this gas is transported on the M2 Louisiana Gas Service system that is not affiliated.

- Any high Btu gas could be potentially getting a price uplift associated with processing (not applicable to Haynesville Shale production).

In summary an owner that believes their payments are understated should contact the lessee (operator?) for additional information regarding how the natural gas is being marketed and what are the post production deductions being applied if not clearly identified on the check stub.

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Permalink Reply by Henry on August 15, 2010 at 8:13

It gets even weirder -- Landowner 18 just went to his neighbor, who does not have that clause in his lease, to see what prices his neighbor got. Guess what? The neighbor is getting the same price as Landowner #18. So it does not appear that Landowner 18's clause is what got the better price. But, even this better Chesapeake price is still not equal to what the other operators are paying.

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Permalink Reply by JD on August 15, 2010 at 13:19

Henry and GoshD,

If you were a UMO in this same section, do you think you would have been paid $3.81 for gas in the month of May? You of course would not have a lease. I think it goes without saying, you probably would not get the benefit of the affiliate clause.

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Permalink Reply by adubu on August 15, 2010 at 14:43

Henry and all --- If my memory is still intact I recall a conference call on Chesapeake Qtly report during summer of 2008 just after the news broke about the Haynesville shale in NE La. Aubrey McClendon the CEO called the wells "Monster wells" and made statement since wells where in La. and therefore closer to the Eastern market that CHK was receiving about $1 more per mcf than compared to the Barnett field in Ft. Worth area. If some one has access to the older conference calls please see if can confirm my memory. If he was true with statement that really add a new twist to the situation of screw job by CHK to the La. royalty owners.

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Permalink Reply by Henry on August 15, 2010 at 23:33

adubu,
I'm real close to turning this over to the Shreveport Times. I'll wait a bit for Les B to chime in, now that he has seen the fields where the data come from. Maybe he can offer a good explanation.

Or... maybe one of the Chesapeake reps on this site would like to speak up and explain this?

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