Here is my question? Say you have 30 wells pumping into a pipe line to the cracking plant. If some wells produce wetter gas than others, then how do you know you are getting your fair share of the royalties from the distilates produced from your well, or would all the gas be mixed together and someone with dry gas recieve royalties on other wet gas wells? if dog rabbit
REGARDING MEASUREMENT: WONDER WHY WE HAVE THE OGM COMPANIES SETTING AND
REGULATING THE MEASURING DEVICES?
WHY NOT THE STATE ? AS IN WHEN YOU BUY FUEL FOR YOUR VEHICLE?
IS THE FOX WATCHING THE HEN HOUSE?
Big decision, do we want a smaller Govt. or an extra state employee wathing out for us?
Are all NGLs valued the same? do some have more ethane or butane? How do we as royalty owners know what the value of our liquids are?
Thank you for all of your honest answers across all of the threads they are very helpful.
Natural gas is rated by the BTU factor and condensate is rated by the API Gravity. Some check stubs have the BTU factor and API gravity listed, however royalty owners are at the mercy of the operator.
RIGHT... AT THE MERCY OF THE OPERATOR.......
WHY? SHOULDN'T A ENTITY WITH OUR INTEREST IN MIND BE CHECKING AND CERTIFYING THE
MEASUREMENTS? PLUS IF THE STATE/COUNTY DID IT (AS IS FUEL AT THE LOCAL STATION FOR
YOUR VEHICLE) NOT ONLY WOULD WE BE ASSURED OF CORRECT MEASUREMENT OF AND PAYMENT FOR
OUR ASSET. BUT THE STATE/COUNTY WOULD KNOW IF THE PRODUCTION NUMBERS THEY WERE
RECEIVING FOR TAX AND DEPLETION PURPOSES WERE CORRECT!
This is so true, Larry. In WV, royalty owners are at the mercy of the producers to report accurately to the state. It takes a court order to get information from the pipeline company, to find out what they actually bought from a well, and to compare with that the producer told the state.
I guess that information (what the pipeline company has access to) would include the quality and makeup of the gas, as is being discussed here.
Need to have in your contract right to aduit. Measurement shall be done to American Gas Association spec.
A gas sample should be taken and run through a chromagraph, this will determane the % of the elements that make up the gas coming from the well. Most is around 88% methane, the % of propane, butane and ethane will give you a good idea the marketable NGLS.
Is there an independent lab that royalty owners can hire to verify the make up of the NGLs?
Independent test would probably be cost prohibitive and the operator allowing such test would not be likely.
It might pay for the members of the drilling unit form a landowners group for this and other issues.