Replies to This Discussion

Permalink Reply by Nancy Mosley on August 27, 2020 at 1:24pm

What state?

• ▶ Reply

Permalink Reply by Donald Welch on August 30, 2020 at 2:52am

West Virginia

• ▶ Reply

Permalink Reply by Moldyoak on August 30, 2020 at 2:17am

Because gas generally is not sold "at the well head" or at least, that's how the gascos define a sale.  So whatever it is sold for - downstream - involves all the *alleged* costs they incur and by subtracting those costs they then arrive at an *alleged* value at the well head, before it begins it's journey through processing, gathering etc.

BTW this is admittedly my simplistic way of looking at it.  There are many state laws which come into play depending upon what state you are in and how for example the concept of "first marketable product" is interpreted etc.

• ▶ Reply

Permalink Reply by Kyle Nuttall on October 28, 2020 at 6:29am

In West Virginia, "wellhead price" will only help you if there's nothing else in the lease that gives the company the right to deduct costs.  If you've signed a lease during the shale boom, that lease will include language that gives the company the right to deduct costs.  You have to negotiate for a change to the lease if you want no deductions.

• ▶ Reply