What Price Are You Getting for Gas? Last Update: March 25, 2011
Hello Everyone,
Here are the latest numbers. If anyone else wishes to participate and provide data for my survey, please follow the instructions below. I welcome all data.
I am now asking each respondent to provide me the following:
Section/Township/Range -- everyone (if you are in Texas, tell me your county, and the survey)
If you get your check from Chesapeake, please tell me:
Price received (before severence tax)
Does your lease entitle you to cost-free royalties?
If you get your check from one of the others, please tell me:
Company you leased to
Company who is operating the well
Gross price
Please tell me each deduction, and the amount.
Net amount (before severence tax). [I know, gross minus deductions ought to equal net, but I just want to make sure.]
Does your lease entitle you to cost-free royalties?
If you are WI or UMO:
Company operating the well
Gross price
Please tell me each deduction, and the amount.
Net amount (before severence tax). [I know, gross minus deductions ought to equal net, but I just want to make sure.]
Please send me the information via GHS email. This discussion is getting too large, and sometimes a post gets lost if I don't check in for 24 hours. All info will be kept confidential. I will continue to post back what I learn periodically. Thanks in advance.
Tags: Are, Gas?, Getting, Price, What, You, for, payments, royalty
Views: 3654
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Replies to This Discussion
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Permalink Reply by Henry on
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GD,
This is not the case. This would not help the UMO. This guy's lease allowed the lessee to sell to his affiliate- just not for a cheapo price. If the lessee sold gas to its affiliate, the lease stipulated ways to determine a fair market price for the lessor's gas.
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Permalink Reply by Henry on
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GD,
This is what I know about landowner 18's lease. He has a clause that is designed to prevent cheapo sales to affiliates. It does not prevent sales to affiliates. It stipulates that "market price" for his lease is the price negotiated with an unaffiliated entity, negotiated at "arm's length." If this is not done, and the gas is sold to an affiliated entity, then there are other terms in the lease to specify what market price will be for this lease. So, I don't see that this would help any UMOs in his section.
I agree -- good numbers are what we want. So how about we agree to provide data only on Haynesville wells? So far, the few numbers I have are already telling an interesting story.
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Permalink Reply by Mike Hudson on
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I am writing in reference to the Kelly well #627533 in sec.19, 15n 14w Desoto Parish.
I have check stubs from three different owners, one leased at no cost, one leased with costs, and the other unleased.
These number are for the first three months of production July, August and September of 2009 with price received and the net value of revenue.
The first leased owner with no cost received for July 3.02, August 2.86, and September 2.30, for a net value to the well of 2,023,960.
The second leased owner with costs received 3.02 for July, 2.45 for August, and 1.91 for September for a net value of revenue of 1,813,687.
The next unleased mineral interest owner, received for July 2.513, August 2.359, and September 1.824 with a net value applied toward the cost of the well and 1,656,323. There is also an average per month of 50,000 expenses that add to the cost of the well
The well purchaser each month is CEMI (Chesapeake Energy Marketing Incorporated)
The price for gas should be the same for all three owners, with any costs deducted in a separate column for leased owners, and added to the cost of the well for any UMO's.
These numbers come directly come directly from check stubs from Chesapeake Operating, Inc. and can be viewed upon request.
Mike Hudson
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Permalink Reply by JD on
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If you take a look at the page below on the DNR website, you can find the Louisiana historical Spot Prices. In the middle of the page under Louisiana Gas Prices, click on the link that says "Price as dollars per MMBTU". You can find spot prices for July, Aug. and Sept. 09 that can be used for comparison purposes.
http://dnr.louisiana.gov/sec/execdiv/techasmt/facts_figures/prices.htm
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Permalink Reply by Henry on
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Mike,
Makes my head hurt! WTF is going on here? I have no idea. Is there anyone on this site who can offer a plausible explanation?
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Permalink Reply by Two Dogs, Pirate on -
Sorry Henry, I am a field landman and don't know crap about advanced math.
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Henry, what is happening is that Chesapeake is paying what they want to for our gas, because it is now legal, although not ethical, to sell to themselves.
The laws of Louisiana need to be changed so arms length transactions are no longer allowed and the people of Louisiana can keep their rightfully owned money, instead of sending it to Oklahoma with Chesapeake!
The people in our section are now writing all our legislatures in an attempt to get this law changed so we can now get "fair market value" for our gas.
We are not asking for the hedged fund price of $6.85 that Chesapeake is getting for 52% of our gas, all we want is "fair market value" which should be Henry Hub price or darn close to it.
Chesapeake is taking approximately 20% off the price of Henry Hub and then paying 25% of what is left for somewhere around
15% net for a leased mineral owner.
Wake up legislatures, we need help!
Mike Hudson -
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Permalink Reply by Les Bamburg on
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Mike, I believe the issue is more related to allowable "deductions" rather than gas sales to an affiliate. So the focus should be on fixing the antiquated & ambiguous language in lease agreements and limiting the type of "post production" costs that can be deducted from the royalty payments. Several states (AK, KS, OK, CO & WV) have already fixed this issue and Louisiana & Texas need to get on board and repair the damage.
By the way, the market price in NWLa would likely be 20 to 30 cents below NYMEX rather than NYMEX flat. -
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Permalink Reply by adubu on
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Henry/ GD/JD/Les B--- Ok data only on Haynesville or Bossier Shale--- other data other formation I guess keep for future use maybe. As GD favorite signing off---ERGO But I will still follow thread
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Permalink Reply by Les Bamburg on
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Henry, it should be understood that most oil & gas producing companies "sell" their natural gas to a marketing affiliate who in turn handle the natural gas sales to utilities, consumers or other gas marketing companies. This approach should not be utilized by the producing companies as a reason to reduce the lease price of natural gas.
I believe the primary issues relate to the allowable deductions in calculating the lease gas price that is the basis for determining royalty payments.
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Permalink Reply by Henry on
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Les B,
I still am confused. If this is the case (and I don't doubt you, because I'm lost here), why is Chesapeake taking out more than everyone else? Why would they be significantly lower for all of the landowners on this site who responded?
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Permalink Reply by Les Bamburg on
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Henry, I am just saying a couple of things.
1) The issue may be more about any deductions Chesapeake is making to calculate the price.
2) Selling gas to an affiliate isn't automatically bad or an attempt to cheat royalty owners. There are legitimate reasons for using a marketing affiliate and this does not appear to be a problem for most companies.
If Chesapeake were my lessee I would be reviewing my pay stub and asking for more information if it appeared I was being underpaid.
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