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Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2020 at 9:08

When you say "market price" are you referring to the Henry Hub monthly settlement price?  Hub prices for physical gas, not daily futures (paper trades) are a "basis" price meaning there is normally a negotiated discount and rarely a premium to come up with the actual sales price.  Many are surprised that most LA "Haynesville" gas is sold not at the Henry Hub but at the Perryville hub. 

In order to get some feedback based on actual gross price, can you provide the price and month from your Aethon royalty statement?

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Permalink Reply by david entrekin on July 30, 2020 at 10:35

The market price I used is from the stock market. The price on my last statement is 1.25 and this is from May production. The sale date is shown to be May 20. I just rec'd today.

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Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2020 at 11:30

I assume by stock market you mean NYMEX.  The NYMEX monthly settlement price for May was $1.794.  Aethon sold your gas for a discount to that basis price.  The best way to compare Aethon's gross price is to ask members in your relative proximity what other Haynesville Shale operators paid them on their May statement.  I suspect that you may be in Bossier or Bienville but whatever your parish you might want to post a discussion on the parish sub-group page and ask for some input from the members.

When you post on a group page, all the members of that group get an email alerting them to your new discussion.  When you post on the main page you have to get lucky that right members log in and see it before it rotates down and off the page.

NYMEX - NATURAL GAS CONTRACT SETTLEMENT PRICE HISTORY

Monthly Settlement Price

YEAR JAN      FEB       MAR     APR      MAY      JUN      JUL      AUG      SEP      OCT       NOV     DEC   YR AVG

2016  2.372    2.189    1.711    1.903    1.995    1.963   2.917  2.672     2.853   2.952      2.764   3.232  2.460

2017  3.930    3.391    2.627    3.175    3.142    3.236   3.067  2.969     2.961   2.974      2.752   3.074  3.108

2018  2.738    3.631    2.639    2.691    2.821    2.875   2.996  2.822     2.895   3.021      3.185   4.715  3.086

2019  3.642    2.950    2.855    2.713    2.566    2.633   2.291  2.141     2.251   2.428      2.597   2.470  2.628

2020  2.158    1.877    1.821    1.634    1.794    1.722   1.495  1.854                                                      1.794

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Permalink Reply by Richard on September 28, 2020 at 10:26

David-- I've noticed the same in Texas. I've compared Aethon's gas 'sales' price (not market price) to other operators gas 'sales' price in my area and on average Aethon is paying 10% less. In addition to that, they are deducting approx. 10% more than other operators in the area for post production costs. To make matters more unsettling, KUDU Midstream LLC is the gatherer of Aethon's gas and SCONA LLC is the purchaser. Both of these entities are Aethon affiliates.

I'm not sure what's going on, but I know of at least two other royalty owners (who've been in the O&G business for many years) that are questioning what Aethon is doing. Something about this just stinks...

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