ODNR releases latest production data

timely as usual.......this is Q1 2014

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0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 10, 2014 at 2:24pm

Booger,

       Thanks for the information.

So we really don't know the amount of NGLs that CHK is removing which leaves it up to them being honest with us.

I'm having a problem with NGLs reducing our royalty payments for oil and natural gas rather than boosting the total.

Smells like theft by deception, and probably is. The PA folks paid to have their gas taken and it looks like the same is going on with CHKs highly prized NGLs. We pay for them to take them off of our hands.  That dog won't hunt.

Permalink Reply by Bluflame on July 9, 2014 at 4:47am

Ron,

  The ODNR data omits NGL's, which can substantially increase $/day. A typical NGL  "barrel" is worth ~$40 at current prices. When NGL's are removed from the gas stream, there is a corresponding reduction of NG. BUT, the value of the NGL's exceeds that of the natural gas reduction. As reported by the drillers, some Utica wet gas wells have produced in excess of 1000 brls/d of NGL's. Frankly, it seems to me that ODNR should require the wet gas drillers to create a third category of NGL's in their production reporting requirement of the drillers. It is a very important economic component.

  Long answer to your short question!

 

BluFlame

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 10, 2014 at 2:17pm

Blue Flame,

      Thanks for the current price of NGLs and additional info.

I have a royalty statement that has negative numbers associated with the NGLs which reduced the royalties paid for oil and gas. It looks like theft by deception and the CHK folks call it an adjustment.

I've been looking for an opinion of someone who knows what a correct royalty statement looks like. The large land owners believe they are being stolen from and I have to admit no one can explain how we could pay to give away our NGLs. It would be nice to know for sure before I turn this issue in to the Ohio Attorney Generals Office.

Would be up to looking at our first royalty statement?   Thanks  Ron  mrrxtech_yah@yahoo.com

Permalink Reply by Bluflame on July 11, 2014 at 5:58am

Ron,

 

 I'm also leased with CHK, but have not yet received a royalty payment. My wells came into production in June. I'd be happy to look at your statement, but cannot promise I can explain the problem.

 

BluFlame

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 11, 2014 at 2:09pm

Bluflame,

      My email address is above, if you have an email address that I can send it to.

It might not hurt to air dirty laundry for all to see, but I would like to give the producer the benefit of a doubt.

When there was a propane shortage during the winter of this year most of the propane companies were selling at $4 a gallon. The propane with the NGLs that came out of the buck well were sold at 12 cents a gallon. There were taxes paid to someone to prove NGLs were taken.

The ODNR is working on a way to monitor NGLs production so NGLs can be taxed. This info I got by calling the NE ODNR Office to see how the NGLs were accounted for and documented after hearing that NGLs were not reported to the ODNR. I wonder where the taxes I paid for NGLs went if the state isn't taxing them yet?

It appears that the O&Gs are on the Honor System, as I see it, for taking NGLs and paying landowners royalties. That said, I did a search for my producers reputation for paying landowners.

Back to work on documenting Theft By Deception!!!!

Document & Report suspicious royalty statement activity, and do it often.

Permalink Reply by jason irvine on July 11, 2014 at 5:25am
I wouldn't wait to contact the attorney general and a private attorney. If someone stolen from your wallet house bank account etc.... we would call the police immediately for theft. It is no different. Oil is 102 a barrel. Gas is 4.30per MCF and NGL 40 barrel. We get paid for the first two and pay for. the NGL. Were does that make sense. If they sell it we get royalties. I assume they are not throwing that away. Also ethane is up.

I am sick of these big companies screwing people on a criminal level and get away with it. And if I steal a 50 cent pack of gum I got to jail.
Permalink Reply by Rene Oldham on July 11, 2014 at 7:10am
So who is the best source to discuss the royalty statements to ensure they are accurate and fair? The attorney who worked with us on drafting the lease agreement? Who is most knowledgable on interpreting the data?
Permalink Reply by Alan Bowers on July 11, 2014 at 2:39pm

Rene,

Although your attorney may be knowledgeable in drafting a lease unless the attorney receives royalty from a well or routinely reviews his/her clients royalty statements he/she probably isn't going to be knowledgeable on the matter.

The best source and most knowledgeable would be NARO (National Association of Royalty Owners).  They are a group whose sole purpose is to represent the interests of Royalty Owners.  They have been around for many years.

NARO is broken down into chapters.  There is a chapter dedicated to the royalty owners in Pennsylvania.  The chapter that covers Ohio is the Appalachian Chapter.

Around the time of the first ALOV-CHK lease signing in 2011 there was an attempt to create a chapter for just Ohio.  It never really took off.

Each Chapter is run by and run for the members of the chapter.  The people who run each chapter volunteer their time to make things happen for the rest of the members of the chapter.

There is an annual membership fee and it is not cheap.

NARO's members who have been receiving royalties for some length of time would be a good source for assistance on interpreting the data.

We really do need either an Ohio Chapter or a group of people who pull together like NARO to assist those of us here in Ohio who are now Royalty Owners.

The guy in charge of the NARO Appalachian chapter is Robert N Hart, PE (Petroleum Engineer) and he is out of Charleston WV.

Permalink Reply by Rene Oldham on July 11, 2014 at 3:43pm
Thank you very much for this. I will investigate further!!
Permalink Reply by searcherone on July 11, 2014 at 3:52pm

Here is link to membership application.  Prices at $150 for an individual.

IMHO a bargain if one is having difficulty with their royalties and the people involved are willing to assist and educate royalty holders.

http://www.naro-us.org/Resources/Documents/NARO_Brochure2014.pdf

Permalink Reply by Alan Bowers on July 12, 2014 at 4:15pm

It should be noted that NARO does not act as someone's attorney but they do work to educate royalty owners and.....

They do act as lobbyists working to get pro-royalty-owner legislation passed into law.

When Mr. Hart came up to Ohio to make a presentation to many future royalty owners back in 2011 the feedback from landowners was that they felt the membership fee was high and that played a part in why the NARO chapter for Ohio didn't take off.

Perhaps now that landowners are scheduled to receive or are actually receiving royalties and are not receiving what they believe is the full amount due, they may see the value in joining an organization such as NARO.

There is a need for landowners/royalty owners to band together so we can protect our interests, whether it be through an organization such as NARO or through this web site, GMS, or a combination of both.

Permalink Reply by searcherone on July 12, 2014 at 5:21pm

Is there a required number of members to get a chapter started?  

And lawmakers always pay attention to an organized group of people more than to individuals.  And issues with royalty checks have only just begun.

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