Replies to This Discussion

Permalink Reply by GM on January 30, 2014 at 9:55am

"As you have said, when the checks start flowing ears will perk up."

I was told by the GCO rep when the checks start flowing the ears will go deaf. (less inclined to be expressing the dissatisfaction of the deductions on royalties and noise and vibrations the burners produce) 

On that note as I look at my 1099-misc form 2013.

Gross value $485

other ded.    $210

Net                $275

Where are you guys coming up with 20% deductions?

Permalink Reply by GM on January 30, 2014 at 12:19pm

Federal reportable income, Gross: 485.00

box #2 485.00

box#3 .00

box#7 .00

Summarized income:

PA Pennsylvania: 485.00

Permalink Reply by Philip Thackray on January 30, 2014 at 12:44pm

GM,

Who is your producer and What unit are you in?

Phil

Permalink Reply by FairMktValue on January 30, 2014 at 2:07pm

GM

Pretty sad looking numbers there ... I assume 1099's don't lie....

The plot thickens.....

Permalink Reply by J Landowner on January 30, 2014 at 3:23pm

Looks like my 1099. XTO is currently paying out ZERO for liquids as the deductions equal what they claim to of gotten for them. Their deductions on the the gas (residue) equal about 19% of that portion of the royalty payment.  

XTO Unit Prices:

November 2013 Natural Gas Liquids (L) $.79 (gals)

November 2013 Residue (R) $3.57 (mcf)

Aren't prices going up? Even a shortage of some liquids? Both of the above are lower than the June figures they used.

Permalink Reply by RB on February 24, 2014 at 1:47pm

J Landowner, there is NO business that is going to spend more than than they make, no how, no way.  Sounds very suspicious.

Permalink Reply by RB on February 24, 2014 at 1:41pm

Oh my gosh, that is terrible and fishy.  No company would invest in the capital necessary to drill plus signing  bonuses in addition to the deduction costs which would result in keeping 50% of what they produce and sell.  That is presuming that their portion incurs the same deduction percentage.  That sounds very suspicious, GM.  What company?  GCO? Don't know that acronym.

Permalink Reply by GM on January 30, 2014 at 1:35pm

XTO_Gill unit north

Permalink Reply by Philip Thackray on January 30, 2014 at 3:04pm

Gm,

XTO has a problem with NGL's since October.  It's late - tomorrow - OK?

Phil

Permalink Reply by GM on January 30, 2014 at 3:14pm

eggs & OJ waiting on your input. Way better than than waiting on Dillon McCandless King Coulter & Graham and the bill that follows.

Permalink Reply by Philip Thackray on January 31, 2014 at 1:54am

GM and J Landowner,

Since October, XTO has been paying to have NGLs hauled away.  They are paying more for transportation than they are getting for the product, that is why the NGLs grosses are being netted out to zero.  Supposedly, XTO is taking a hit to prevent those net numbers from going below zero.  I don’t know what happened in October but before that July, August, September there was no transportation charge (this from people on the east side of Route 8, the west side of Route 8 did not go online until October).

This information is coming from an “analyst” in Huston that emailed me and from a conversation I had with a landowner on Mushrush Road who talked to Bruce Kerr and John Maloy at XTO in Warrendale.

Presumably, some pipeline that is under construction will solve this problem but not until second quarter of 2014 – this later piece of information was vaguely conveyed to me, I’m hoping for more clarification at some point.

For now, of course, the percentage deductions look really bad.

The NGLs must go to a fractionating plant and they have limited capacity.  I’m guessing that XTO got bumped out of the cue for local fractionating by companies with stronger contracts.  I’m told that they are now trucking the NGLs to the Gulf Coast market.

 

J Landowner,

Did you reverse your NGL price number?  I have $0.97 per gallon for November.  The end market price fluctuations for propane caused by the long mid-west corn drying season and now the cold weather don’t seem to have affected the cryogenic plant NGL output prices.  I know that earlier prices were more like $1.05 but there has been a tremendous growth in the source of NGLs.  There are some fundamental reasons why the long term cap on NGL prices is about $1.50.

 

Phil

Permalink Reply by FairMktValue on January 31, 2014 at 3:26am

Phil,

VERY interesting information you have there!

Lotta food for though. I will be chewing for a bit!  lol

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