The drop in gas price is scary!

I'm looking at the drop in natural gas prices from a royalty owners perspective. Hopefully, there will be an increase in the future. Wishful thinking!

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Permalink Reply by Frank Walker on January 30, 2015 at 4:38am

Good post, Zack.  I'm with you!

It's alarming. The level of oversupply must be beyond imagination.

Weather right after the Super Bowl is forecast to be incredibly cold. Yet there appears to be no impact on our price. Oh, woe.

ETA

That said, I have to admit my January royalty check just received was higher than anticipated.  I attribute that to sales contracted prior, at higher prices.  

Permalink Reply by frank speaker on January 30, 2015 at 6:31am

Is there a lag on your checks or were they for January sales?

Permalink Reply by Zack Jameson on January 30, 2015 at 6:48am

My royalty checks with be here is a few days. I believe they will be for the month of November (sales).

Permalink Reply by Frank Walker on January 30, 2015 at 10:15am

Frank

I honestly do not know.  My payment shows up (generally) last week of the month via ACH and ROP (royalty owner report) will say it's for January.  The ROP comes by snail mail a while later.  The actual money, obviously, is not in form of a paper check per se.  This is 2015, after all.  Checks are old-fashioned.  I should have put the word "check" in quotation marks when I posted earlier responding to Zack.  My bad.

Permalink Reply by frank speaker on January 30, 2015 at 6:55am
If they come in higher than the market price for November that would be good news.
Permalink Reply by Robert Bond on January 30, 2015 at 7:21am

Don't panic when a product's production increases quickly most of the time price suffers, then it gets more uses (electrical generation and etc.)after this price will recover.  Ask a farmer about how the pig market cycles and cattle and grain markets as well.  This cycling is becoming much more common with this world marketplace and the highs and lows in price much more volatile.

Permalink Reply by frank speaker on January 31, 2015 at 3:19am

What I,m trying to determine is exactly on what basis these royalties are determined. Which market, which contract, what bonus, what rebate , what subsidiary, whose expense, on what sale date. All  these are hidden from the lessor and unreported to the state.

Permalink Reply by Frank Walker on January 31, 2015 at 5:14am

Zack

Not scary alone but, as I write this . . . . . . . . . . . . ONGOING!!

What the heck is happening!?  The weather could not become much colder.  Temperatures are far below average.  People should be buying and using our natural gas like crazy.  We only have remaining four more weeks of this cold weather so favorable for sales.  After that, much warmer weather is forecast.  This is not going well at all.

Permalink Reply by Sherre Boyanowski on January 31, 2015 at 6:28am

There is some BIG monkey business going on in the market. I'm sure a lot of it is not legal to be sure. There are those who know how to manipulate it and do.

Permalink Reply by Zack Jameson on January 31, 2015 at 10:59am

I received my royalty check today from Noble. The other from CNX will arrive next week. My current check has declined so much. It's very discouraging and these royalties are supposed to be paid for years? That's hard to believe with the big decline so soon. I've been receiving royalties for just a little over a year now and the decline has been nothing less then scary. We (landowners) never thought about how the low gas price would affect our royalties so much. I hope the situation improves.

Permalink Reply by frank speaker on January 31, 2015 at 12:20pm

This happens because the expenses stay fixed while both the price and production decline. Soon they may be shut in altogether while waiting for prices to come back, which they surely will.

Permalink Reply by gary smith on January 31, 2015 at 12:50pm

opec spokesman just blurted out that oil will be 200 a barrel soon.

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