Royalty checks are down about 80%
Hello, my royalty checks have dropped about 80% over the past 6 months is anyone one experiencing this due to the drop in price or maybe a production thing on my property? Im at SEC 30 Township.012N Range.015W
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Replies to This Discussion
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Permalink Reply by Christopher Combs on -
Hey rick - we own in this unit as well. Two things are at play here, 1) The new Hewitt wells were dilled in 2020, so at this point are well off their peak production. 2) Last summer with high gas prices, the drop in production volumes was offset by the higher market prices.
Now that prices are back down to the $2 level, it's like we are getting it from both ends! Hope this helps.
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Permalink Reply by Rick Hilton on
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Hello Christopter, I wonder if we are related? My Great Grandfather Solomon Hilton was one of first settler in the area the land has been in my family a few generation. Thanks for the feed back Im pretty out of touch with how everything works but I did know the price dropped and that a couple of the wells are older and not deep enough to produce much and that the Hewitt ones you mentioned have been doing the best as far as production. I was getting spoiled from the past year and a half checks. If we are related we should keep in touch. Thanks for the reply
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Permalink Reply by Skip Peel - Mineral Consultant on
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In addition to Christopher's spot on comments, there is another factor at work regarding the net dollars that appear on a royalty statement. Post production costs that operators deduct are largely based on a cost per mcf. If you have wells that are subject to a gathering and treating cost of 30 cents per mcf for example that would represent a 5% reduction in your net revenue at $6 gas. At $2 gas that same 30 cents represents a reduction of 15%. As the price of natural gas declines, your post production deductions take a bigger bite out of your net revenue.
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Permalink Reply by Rick Hilton on
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Thanks Skip, you probably don't remember me but I sent you copies of my statements from Comstock to review last year things were much better then. you noted the 2 old shallow well that won't be producing much in the future. Thanks
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Permalink Reply by Skip Peel - Mineral Consultant on
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Yikes. And we thought CHK was bad when Audrey was calling the shots.
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Permalink Reply by M B Gilster on
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For April production CHK had me @ $1.85-$1.87
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Permalink Reply by Skip Peel - Mineral Consultant on
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Keep in mind that one of the price variables is the hub at which the gas is sold. Most of the Haynesville fairway gas goes to Carthage or Perryville. Both have a hub price that is a discount to the price at Henry Hub.
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Permalink Reply by Bill R on
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I just received our lowest Royalty Checks as well... $1.71 - 1.73... even some of our higher producing Wells paid way less than expected.
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Permalink Reply by daddy bill on
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How about $1.22 paid by Sabine Oil & Gas in Panola County, Tx for April gas. They are obviously deducting post production costs, but this is ridiculous. They then still deduct a small compression and of course the severance tax.
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