NGLS and Oil...How to verify production?

I own mineral rights in Wetzel County. 30 wells have been producing for the past 18 months. I have been getting paid royalty for natural gas but have received zero royalty for oil or NGLs.

Is there a reliable method to verify if my wells have been producing NGLs and oil, and, if so, in what quantities?

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Permalink Reply by Marcus Huey on January 8, 2016 at 1:55pm

Unfortunately there is no mention of BTUs on our checks or stubs. 

Permalink Reply by Kyle Nuttall on January 5, 2016 at 3:19pm

The best way to verify production is to get out on site and check the gauges. Like Mike Fulper said, be friendly with the well tender. He'll be able to explain how to read the gauges. Let us know what you find out.

Permalink Reply by KAR on January 5, 2016 at 4:28pm

You're a lawyer and advising people to trespass onto a well site? A well tender has a reason to not to show landowners (even landowners getting royalties from the wells) around the well site without permission. He probably won't have a job by the next day if his employers find out. Especially since chances are you're not going to be wearing the proper PPE. 

Permalink Reply by Kyle Nuttall on January 6, 2016 at 5:32am

A mineral owner has the right to use the surface in whatever way is "fairly necessary" to develop the minerals, and you could make the argument that a mineral owner is doing something that is "fairly necessary" when they go out to check the gauges.

However, your point is an excellent one.  You really shouldn't do anything that is unsafe or unwise.  Every situation is going to be different.  Be careful and be thoughtful, and don't get some poor schmuck fired by taking advantage of their kindness.

I sometimes forget that common sense really isn't that common.  Thank you for the reminder.

Permalink Reply by Marcus Huey on January 6, 2016 at 5:52am

Kyle, our NG goes, via a pipeline, to a processing plant. Should the processing plant have records available that would show the quantity NGLs that were separated from or NG? We are in a wet gas window and wells surrounding us, being developed by other gas companies, are reporting NGL production.

And, are those records available to the public or would it take a court order to access them?

Permalink Reply by Kyle Nuttall on January 6, 2016 at 6:50am

The plant will have records.  That's how they determine how much and who to pay.  Those records aren't reported to any public agency.  You would probably have to be in a lawsuit situation to get access to those records.  If you have an audit clause in your lease you could get to the producer's records.  The producer will know how much of each kind of gas they produced.

Permalink Reply by Marcus Huey on January 6, 2016 at 9:15am

So hopefully there really is a way to prove the actual production, that's a relief. And, yes, I would imagine it would require some form of legal request. Thanks, Kyle!

Permalink Reply by DESJR on January 6, 2016 at 12:30pm

"I sometimes forget that common sense really isn't that common"

Now if that is not the quote of the year. Very true.Stupid seems to run rampant anymore. No vaccine and no cure. Here is your sign.

Permalink Reply by Tony Yurina on January 7, 2016 at 4:15am

Any verification must start with a review and complete understanding of the well pad equipment and facilities there first, followed by a witness calibration of the measurement flow computer (doubtful any paper chart recording gauges are used for the new large volume shale wells today) and secondary elements associated with the meter for any given well.

An understanding of the use and proper operation of the gas conditioning equipment if in existence and use.

An understanding of how any free liquids, brine, water or NGL's (drip gas) collected upstream of the meter and or downstream of the meter.

An understanding of the gas quality (gas samples and techniques used to procure them) program and laboratory used to process any gas samples  or gas quality measurement equipment that may be used to provide the gas quality (Btu's/CuFt.) and gas composition of a given well.

A thorough audit of all the data accumulated and methods used to associate and totalize the natural gas vapors which are metered and reported.

Identification of any hydrocarbon liquids or natural gas vapors not measured or quantified by the meter.

Ascertaining whether any custody transfer and related downstream processing plant may be associated with the fiscally reported information.   

There are several links in this chain, I attempt to help enlighten the members, nothing more or less.

A lease agreement providing audit rights is a highly recommended point to consider.

Permalink Reply by Marcus Huey on January 7, 2016 at 7:22am

Thank you Tony...I really appreciate you insight and knowledge.

Permalink Reply by David Allen Lilly on January 6, 2016 at 1:44am

 We are scheduled to go into production with Chesapeake in April.

I have a number of concerns, not the  least of which is being paid per my lease terms, which includes NGL's.

Permalink Reply by Indiana Smith on January 6, 2016 at 1:54am

David Allen,

I am leased to CHK too and have a few acres that are in a unit.  Here's the deal:  You can't take any legal action until you are "harmed".  Once your well is in production, and you find out that you have been shorted (YES, CHK is going to short you, I can guarantee it), then you can take legal action.  You can either file a new lawsuit, or join in one of the class action suits.  Probably best to join one of the existing suits.  Pick the one that is representing a similar lease to yours.  Good luck.

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