Replies to This Discussion

Permalink Reply by Henry on January 17, 2011 at 7:16

Joey,

I cannot answer about how EnCana and Shell sell their gas.  But I can share with you the prices that other landowners are getting.  Go on the main page, and search for my discussion called "What Price Are You Getting for Gas?"  There is a spreadsheet in there of gas prices for about 50 landowners, and you can compare your prices to theirs.

 

Note -- the last couple of checks you received were likely for production in September and October.  Gas prices were lower then than they are now.  So you cannot compare today's price to the price on the statement you are receiving.  There is about 3 months difference.

 

And...  if you wouldn't mind emailing me and sending me your prices, I'd appreciate it.  I can then add you to my database.

Permalink Reply by Joey on January 17, 2011 at 8:59

According to our statements, our checks are 2 months behind, so the one we just got was for November's production.  We just started receiving royalties in November (for September's production). Encana and Shell split 50/50 on paying royalties.  Along with selling low, Encana is also showing a different production rate on the check stub each month than Sonris and Shell reports.  It's always .9705 (exactly that) lower.  That's fishy to me.  I've started a spreadsheet to track this to see if the trend continues, and if so, try to call someone at Encana to find out why.  Here's what we have so far (haven't yet gotten Shell's check for November).   Well #240843  S5-T12N-R8W  Liberty FIeld, Red River Parish, Louisiana

Sept 2010  163,800 (Encana shows 158,974)  Encana sold at $3.59  Shell at $3.74

Oct  2010  110,713 (Encana shows 107,452)  Encana sold at $3.46  Shell at $3.64

Nov 2010   85,421 (not shown on Sonris yet)   Encana sold at $3.11  Nothing from Shell yet

Let me know if you need anything else.  If something is going on that shouldn't be, I want to know.  Thanks!

Permalink Reply by Joey on January 17, 2011 at 10:16

Actually, I put my calculation in there wrong.  Encana shows production at 2.95% less than Sonris and Shell for both September and October.  When Sonris shows production for November, we'll see if Encana is again 2.95% lower. 

Permalink Reply by Pelican on January 17, 2011 at 12:46

the production figures you have are correct.  the .9705 sounds like a Btu factor.  They apply a heating value to the gas before it is paid.  a lot, if not most the haynesville zone gas has a Btu of less than 1.00.  for 9/2010 and 10/2010 what was reported to the state is correct.  On your check there should be a Btu factor that was applied to the MCF at 15.025 pressure base.  What is reported to the state is on an MCF basis at 15.025.  The EnCana and Swepi checks that i have seen, has the Btu on the stub.

 

Permalink Reply by Les Bamburg on January 17, 2011 at 11:58

Joey, following the "futures" price is of little value except for the final settlement price and then it is only indicative if that month.  So the February NYMEX contract will have a final settlement on January 27th that will be for February production.  Your sales price will have some lower value due to basis and any deductions.

 

Your prices from EnCana for the three months do not look to bad compared to the NYMEX values of $3.651, $3.837 & $3.292.  Your average difference is ~ $0.21 which is close to the basis for the gas sales pipelines in the area.  The 2.95% value might be for fuel that EnCana is deducting.

Permalink Reply by Henry on January 17, 2011 at 14:21

Joey,

Thanks.  Based on your prices, I'm going to assume you have cost-free royalties.  If you don't, please let me know.  And when you get your Shell prices for November, I hope you'll send me an update.  Thanks for participating.  I hope you'll send my your prices every month from now on.  I appreciate your cooperation with my survey.

Permalink Reply by Joey on January 26, 2011 at 5:31

Henry, here's the Shell numbers for November.

Production at 88,014 - sold at $3.20

Still can't figure why they are selling for a lower and lower price each month when we're coming into the winter cold.  Maybe they just sell on a particular date rather than trying to get the best price they can. I don't know.

Permalink Reply by Bacon on February 4, 2011 at 1:59

Hey Joey, We also have an interest in an Encana/Shell well.  I noticed the same thing about the Encana share being smaller than Shell. Please keep me posted when you get new info and I will do likewise.

Permalink Reply by Robert Duke on February 4, 2011 at 7:30

Yeah, I am in the same situation, and I owe you (Joey) an update.  I finally have 3 pairs of checks, all with Encana showing lower gas volume and much higher deductions than Shell.  Also, I read something somewhere on the site about severance taxes; I am getting severance taxes, and supposedly they should not be deducted until a horizontal well has paid for itself.  There is serious nickel-and-diming going on, and the prices Encana is getting for their gas are significantly lower than Shell to boot.  Anyway, I'll crunch the numbers over the next couple of days.

Permalink Reply by Lisa Weaver Smith on January 17, 2011 at 11:24

I have two Wells so far in red river parish with Samson your first check is for three months and normally a large volume is sold you can expect your checks to go down as they choke the well back
I was told you can kinda get an idea of your normal check to look most like the last month on that first big check. But You do have to factor in the price of gas for that month. Boy does that make a huge difference.

Permalink Reply by Les Bamburg on January 17, 2011 at 11:59

Lisa, the drop in volume produced would be typically related to the natural well decline rather than a well being choked back.

Permalink Reply by Lisa Weaver Smith on January 17, 2011 at 12:26

I was told they choke them all back to a certain amount. We r new to this too our well is the two breedlovw well 36 and 25 we were told they both r great Wells but it seems the volume goes down fast.

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