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Permalink Reply by emily amedee on February 15, 2013 at 18:52

So if Sonris reports  18232 for January (nat GAS) how would you figure royalty payment at 0.01074219?  (27.5 acres in a 640 pooled unit) 25% royalty>  

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Permalink Reply by Skip Peel - Mineral Consultant on February 16, 2013 at 5:40

emily, you'd have to know the net price per mcf.  That times 18,232 mcf would give you the monthly production in dollars.  Then multiply by your decimal percentage (0.01074219). 

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Permalink Reply by emily amedee on February 16, 2013 at 9:35

Thank you so much I've been trying to figure this out!

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Permalink Reply by emily amedee on February 18, 2013 at 20:59

Now I am going to try and conquer what the true meaning of 25% royalty is!!!  So far it looks like a small fraction of 25%~ (very small)

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Permalink Reply by Dion Warr, CPL on February 11, 2013 at 9:32

Frank:

(Laughing as I say it) It gets better...  In addition to some folks using/misusing mcf/MCF/mmcf/MMCF, there is also an albeit narrow sector (usually not directly engaged in the field end of the business) that refer to millions of cubic feet as "Mcf" (capital M) and thousands of cubic feet as "mcf" (little M).

 

The rule here is not hard and fast, obviously...  You have to look at context.  If a company is all excited with a well making 12 MCFD, they probably mean "million", not "thousand".  Once you figure out what they mean from the context, divide by time accordingly.

 

If you're looking at SONRIS, well production is reported in thousands of cubic feet (mcf or MCF, whichever you rather) per month (as production is reported to the state monthly).  Oil (or liquids) are reported in individual barrels (bbl) per month.

 

An added piece of info: if you're looking at well tests and/or allowables, these are expressed in terms of allowable production per day, per the standard, but the units of measurement of physical product (oil/liquids or gas) are the same.

 

Another piece of info: if you're looking for NGLs in the reporting to SONRIS, they are not there.  Plant products that are separated out of the gas stream (as defined under standard temperature and pressure) such as NGLs are generally reported with the gas, even though they may be sold as PPROD or as "rich gas" to the purchaser(s) at different rates than "lean dry gas".  Condensate (which may exit the well at heat and pressure as a vapor) but which exists at standard temperature and pressure in a liquid phase is generally counted as "oil" or liquid.  SONRIS does allow for reporting of condensate; other states may or may not.  SONRIS does count "condensate" as part of its "total oil" reported for production purposes.

 

There is a decent (non-technical) explanation of all of this in an article linked here.

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Permalink Reply by Lee White on February 18, 2013 at 20:25

They just can't keep it simple such as using the word thousand for 1,000 and the word million for 1,000,000.

Thus using TCF for thousands and MCF for millions.

If they did not confuse so many people maybe they would not have to answer so many letters and phone calls.

 

 

 

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