My latest royalty check was the smallest to date !

I'm closing in on 2 years of receiving royalties and my latest check is the smallest yet. We were told these wells would produce for 20+ years, it sure doesn't seem that way now.

Views: 4322

▶ Reply to This

Replies to This Discussion

Permalink Reply by Frank Walker on June 30, 2015 at 2:36am

"My latest royalty check was the smallest to date !"

Ditto.  The only persons receiving large royalty checks today are the winners in life's lottery.

I feel really fortunate to be getting any royalty money at all!! 

Permalink Reply by mark ondrusek on June 30, 2015 at 2:44am

I am in the same position.  you have to remember it is very early in this game.  we must be patient.  the problem..too much gas not enough infrastructure.  it will get better...lets just hope we are around too enjoy it!

Permalink Reply by Zack Jameson on June 30, 2015 at 2:55am

The pipelines have been the biggest money maker for me so far. MarkWest, Rover and soon Leach Express. They all crossed my land.

Permalink Reply by Mike Herceg on July 9, 2015 at 6:15am

Did you have a separate Gas Drilling and Pipeline lease ? - If so , what is reasonable to ask for $ per Lin ft ? Replantings ? Timber Value ? and specify the # of lines going in at time. Did not leave it open so they could add another line anytime ?

Permalink Reply by Tim on June 30, 2015 at 3:01am

Sheds a new light on the 'never sell' discussion.

Permalink Reply by Gas Boy on June 30, 2015 at 3:20am

Frank - please clarify - who are "the winners in life's lottery"????

Permalink Reply by Barb Smith on June 30, 2015 at 11:56pm
All the money is in the Royalty not the signing bonus. I remember those days
Permalink Reply by Jim Litwinowicz on June 30, 2015 at 5:18am

Lets see, wells deplete over time and produce less.  Prices of all hydrocarbons, from gas to wet fractions to oil, have all dropped tremendously. Some areas with lack of pipes, have seen drops below production costs inducing producers to either cap wells or reduce flow rates.  All of that will cause royalty checks to drop.

I don't know where you are located, what your wells are producing, what pipe capacity there is, how many wells are in the unit, who the operator is, how well the frac job was, etc.

You may see a rise in royalties if prices rise, new lines go online, new wells are drilled in your unit. But they may continue to drop as old wells deplete and if prices fall further.

All of this is out of our control. But knowing that royalties will fluctuate, sometimes wildly, lets us know to be cautious in investing/spending what we do get.

Permalink Reply by Zack Jameson on June 30, 2015 at 5:26am

I'm located in a prime area. The unit is over 1200 acres with 11 wells. CNX and Noble are in the venture together. Noble drilled the wells. It's right near Majorsville, WV, so the infrastructure is there. Everything is perfect, but the money has dropped off.....go figure.

Permalink Reply by Todd on July 8, 2015 at 4:28pm
Zack,

Are all 11 wells drilled to the Marcellus? Or, are some drilled to the Upper Devonian Shale, ie, the Burket?

Thanks, Todd
Permalink Reply by Zack Jameson on July 8, 2015 at 10:53pm

All are drilled for Marcellus

Permalink Reply by Dexter Green on June 30, 2015 at 6:59am

"We were told these wells would produce for 20+ years"

1. You were lied to

2. In the event a well does last that long the royalty will tremendously small by year 10 and irrelevant by year 20

If you're nearing the two year mark then you've likely seen 65-70% of the total royalty from those wells.  Add to that the collapse in the macro market and the differentials in Appalachian pricing and you've got yourself a recipe for rapidly diminishing returns.  If you don't mind my asking what is the total per acre royalty that you've gotten from day one to today?

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service