can any one tell me why the royalty checks have dropped to almost half the original amoun? thanks  cjs

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  Was it half the amount because of a drop in production or was it price. My royalty checks have the amount produced gross my percentage of that amount and the price per barrel on them.

  When under Carter they passed the WPT some landowners were ripped off by 60% as it was not a tax upon profit but rather a well head excise tax.

  Drop in production could be any number of causes. depending upon what type of well it is.

are we to expect a rise in the amount ,,and so it does depend on the amount of gas that is being produced?

 YES INDEED IF  production is increased. Here will be a problem for a while.  The logistics of delivery. Our gas pipe lines are old and in some areas there is nothing close by to ship the gas through. You may have a hell of a well but it can only release what the collective gas lines can handel. Kind of like trying to take a firefighting hose and shoving it into a garden hose. 

 Percentage of what is shipped off the property GAS, Oil or combination of the unit that you are part of  is your royalty amount. 

How long do you think it will take to get all the infrastructure in place to handle all this production?

Looks like a logistical nightmare !

Been such a mad scramble to lease , now they have to drill to HBP , then infrastructure must be built to transport it all.

How are the NGL's and oil handled? Piped or trucked? If there is a limited system to get the gas to market then this has to be a limiting factor for amount of NGL's that can currently be extracted too. I mean you have to do something with the gas after condensate extraction , right? Ironic that gas gets cheaper by the day while oil and condensates (I assume) go higher. Perplexing problem to be sure.

Glenn, I've been told that the ethane is currently being trucked to a river terminal in WVa and is barged to the gulf coast area. I suspect this ethane is from SW Pa as well as the beginnings in our area.

Shell is looking for an Ohio river site for the cracker plant. Makes sense.

Wouldn't it be something if it went in Horseheads soon to be defunct site!

Glenn, a couple different folks have told me they believe the site in contention in Pa is the old Aliquippa Steel Works. 

There are 3 plants going to be built I've been told. One will definitely be in WVA, possibly two. Ohio and their smart governor won't let one get away from them. Pa is in the mix, however I suspect the higher cost of doing business (any business) in Pa may keep them out....dunno time will tell.

Billy, Did you see a halving in the production the first 2 years?

Wells deplete rapidly, often by half the first year.  They will drop again by half the second year. And since nat gas prices have dropped to below $3 MCF your checks will fall again.


If they decide to rework the well, the production and your checks will go up somewhat depending on how successful they are.  They may also drill additional wells on the same pad which will bounce your checks way up....for a year or two.

Me and a few friends that haven't been drilled on yet. Was wondering about how much are royalties on an acre per day or per month. Thanks

You have to know what the well is producing first. The royalties vary from area to area some are at  the old 1/8th  (12.5%) and some leases I have heard as high as 20% ! Try this info (REMIND YOU THIS IS A VERY GOOD WELL) some are even better some are way less so plug in the figures to match what you might hope for and say only 20% of your dream and you will get an idea.

http://www.dispatch.com/content/stories/business/2011/09/28/chesape... 

The company also drilled two wells in Carroll County, also in eastern Ohio. The first is producing an average of 3.1 million cubic feet of natural gas and 1,015 barrels of natural-gas and oil liquids. The second is producing 3.8 million cubic feet of gas and 980 barrels. 

You have to know how many acres are in the drilling unit and how many acres you have in that unit along with your lease contract royalty %. Then use this to get some ideas.  http://www.shalebiz.com/pages.php?page=6 Thank the web owner for the calculator.

 

BE CAREFUL!  Any production data in a press release is likely a MAX, and even if they say "average" its at most a 7-day average.  Plus, companies who want to make a splash can pull harder on the well - sacrifice total volume to get better initial production.

Be sure not to project early numbers far out in to the future - what was stated above (1/2 decline) are good statements to keep in mind.

 

Cheers!

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