Replies to This Discussion

Permalink Reply by LewPa on January 31, 2014 at 12:03pm

Phil

Maybe the deal between Rex and Markwest isn't that bad after all. My payments from Rex for Nov, are Gas R1 $3.54 (approx 60% of the total payment), PPRO R1 $1.61 (approx 25%), and PPRO R1 $1.20 ( approx 15%). They don't explain what the PPRO R1s are but I'm guessing one of  them or both make up the NGLs you mention. All prices are based on MCF. Deductions were then taken out. LewPa

Permalink Reply by J Landowner on January 31, 2014 at 4:35pm

Phil, Thanks for the info. I am a small parcel in the Zacherl unit so we are East of rt 8. November on my statement in front of me is showing $.79. Did get a little bit for the liquids in July, August, and September. No transportation deductions but the processing deductions were way up there. June (first month) was 100% deductions. July was 93%, Aug  41%, Sept about 53%.

So are the liquids being removed over on the Rath farm? That's where the cryo plant is correct?

 

Permalink Reply by Philip Thackray on January 31, 2014 at 5:23pm

J,

I can't explain the $0.79??

Yes, on the old Rath farm.  They call it the Hick Road plant.

The high deductions may be due to the percent of NGLs to dry gas.

Phil

Permalink Reply by J Landowner on February 2, 2014 at 6:39pm

Got a question about the plant. I thought from way back that they had said one reason for the location was it was next to the railroad tracks for transport. Are they not using them to haul at least some of the liquids?

There was an article on the Pittsburgh Business TImes back in June when it opened. Said that the liquid propane, butane, and ethane would be sold to MarkWest Energy which then ships it to their plant in Washington County. The methane was to go to NiSource.

Permalink Reply by Philip Thackray on February 2, 2014 at 7:04pm

J.

Long ago I was told that the railroad option was scrapped.

I don't think they have a overriding contract with Markwest.

Phil

Permalink Reply by Philip Thackray on February 3, 2014 at 8:22am

J,

There is a pipeline from the XTO Hicks Road cryogenic plant to the Markwest fractionator in Houston, PA built to carry the NGLs but as of last summer it was not completed.  Is that the "pipeline" they are waiting to complete before they can profitably sell the gas???  That does not make sense if the problem is production capacity in Houston, PA.

That is why I was/am confused by the comment made to me that XTO is waiting on a pipeline??

Phil

Permalink Reply by Philip Thackray on January 31, 2014 at 12:39pm

Lew,

You may be right!

I have seen that PPRO R1 repeated (with different prices) on the Rex check stubs (Evans City Sportsman Club) but could never figure out exactly what it meant.  On the Rex stubs there is a fractionation fee associated with the "PPRO R1" products.  That means an additional step (with deductions) after the cryogenic plant that XTO does not do.  Hard to compare with the information I have now especially since XTO is in some weird NGL transportation deduction mode.

It would be very helpful to know what the higher cost PPRO R1 is and what the lower cost PPRO R1 is.  Based on published compositions of local (Southern Butler County) wet Marcellus gas I can’t begin to make a guess.

If anyone cares to play the “Guess the Rex Check Stub Entries” game, here is a starting point:

However, I don't begin to believe the Natural Gasoline percentage (field and plant condensate) - it is way too high based on marcellusgas.org published production levels.  I still think ethane is being rejected into the methane stream.

Phil

Permalink Reply by LewPa on January 31, 2014 at 2:36pm

Phil

Here's the facts straight from the horse's mouth, Rex. The PPRO R1 @ $1.61 is the NGLs (Ethane, Butane, Propane, Isobutane, and heavy liquids) that are trucked out to the Markwest plant. The second PPRO R1 @ $1.20 is Propane that is separated at the plant from the above and sold on the local market. The gas is the only thing that goes into the pipeline. The Stebbins well also makes a little condensate, which is similar to a light crude, and sells for crude oil prices you see by the barrel. In three months they have't sold any yet, so it is a little. Hey anything helps!  LewPa

Permalink Reply by Philip Thackray on January 31, 2014 at 3:14pm

Lew,

Thank you for that infomation.  However, I went back to the Rex "check stubs" I have and I still cannot make sense of it.  Rex has a very odd way of displaying the well results.

What are the large negative (xxxx.xx) numbers in the Net Share column.?

Phil

Permalink Reply by LewPa on January 31, 2014 at 3:52pm

Phil

I agree they are confusing as hell, but I'm starting to get used to them. The main problem is they're showing previous months to the one you're getting paid for plus your current. The reason for that is, and to answer your question on the large negative numbers, is they are showing the updated sales adjustments for that product. If you look right above that negative number you'll see the new higher price that they got for it, subtract the negative from it, and you'll get the balance that they are adding to your check. If I understood it right with Markwest separating the Propane to sell locally, that would mean the local retail propane dealer's trucks could just go to the plant and fill up and deliver it right to the customer!! Capitalism at it's best, cool as hell!! LewPa

Permalink Reply by Philip Thackray on January 31, 2014 at 3:57pm

Lew,

I'm sure having a few rolling months would help.  Anyway, Linda leased her couple of acres on Stuckey road to Rex and we were told she will be in the expanded Stebbins Unit.  So soon enough we will have to deal with Rex check stubs.  You'll probably hear from me then!!

Regards,

Phil

Permalink Reply by FairMktValue on January 31, 2014 at 6:17pm

Wow Guys,

Can this get any more complicated ? My head is hurting trying to follow and digest it all. The only thing I see as consistent is the inconsistency!   lol

I guess I never really thought too much about accounting for the NGL's. That throws a half a dozen more curves into the calculations! 

Hey, and thank you guys that are actually getting checks for sharing the information with those of us that hope to in the future. By that time I may begin to understand at least half of it! lol

Cheers

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