Replies to This Discussion

Permalink Reply by Philip Thackray on February 1, 2014 at 7:59am

FMV,

It is more complicated!!

The NGLs are very important depending upon your location.  I had noticed that NGL were not called out in the Marcellusgas.org reports and I mentioned that fact to Todd over at the Beaver County, PA discussion and here is what he said:

“Phil,
All of the data that Marcellusgas.org condenses is taken from the PADEP production reports that is reported biannually by the operators to them. Next reports due 2/15 for the second half of 2013.
The DEP only requires operators to report dry gas, condensate and oil currently. The dry gas numbers are calculated by CHK (not sure how others do it). So C2 - C4 are not included.
Rob and the folks at DCNR are willing to relay their info to us because it's public information!
Best Regards,
Todd”

(By the way, Todd has posted an interesting source for Well Plats here: http://gomarcellusshale.com/group/beavercounty/forum/topics/well-plats ).

Anyway, since the PADEP data yields no information about NGLs, I thought that I would post the November gross sales numbers for the two Marburger B wells combined :

Residual gas at $3.57  - $503,092.00 (November 14)

NGLs at $0.96 (average) - $295,227.00 (November 14).  So the NGL sales is quite significant.  (the residual gas number will be publically available in February and I don’t think that the NGLs sales are a secret, they are just not reported, so I don’t think I’m “talking out of school” here.)

I will not know how these wells compare to other XTO and newer Rex wells until the Pa DEP data is available in February.  By the way, these two wells have relatively short laterals – about 3000’ long.

Roughly speaking (in the general area of Southern Butler County, PA), as one goes toward the North West, the percent of NGLs increase but the total volume of hydrocarbons decreases and as you go to the South East, the NGL percentage decreases but the total volume of hydrocarbons increases.

Phil

Permalink Reply by FairMktValue on February 1, 2014 at 12:16pm

Phil,

I am surprised - That IS a quite significant number !!!

Permalink Reply by FairMktValue on January 31, 2014 at 7:18pm

"Lessee shale be entitled to deduct $0.00 (ZERO ) Dollars per MCF from the sales price received, which deduction shall be considered to encompass all charges for transportation, treating, dehydration, compression, processing, gathering and marketing."   ( Rex no deduction addendum)

Hate to ask this question (no don't, I love kind of stuff. lol) but.....

Lets say I have this clause in my lease with XTO....

Lets say that the above described situation where XTO is selling NGL,s at a loss because of transportation costs is true. (and Phil I certainly am not questioning your sources or credibility, entirely plausible situation, somebody made a bad business decision)

Now given that XTO is receiving a "sales price" (albeit at a loss for a a bad trans decision) ......

As a Lessor am I entitled to my cut of the "sales price" ???

Hmmm.... don't seem fair does it? 

Cheers!!!

Permalink Reply by Philip Thackray on February 1, 2014 at 8:03am

FMV,

With a no deduction clause, I think, that you would get the sales price.

Another reason that "no deduction" is good for the landowner but could be VERY bad for the producer.

Phil

Permalink Reply by FairMktValue on February 1, 2014 at 12:26pm

Now the "smart a$$" cynic in me has to ask....

They should pay but would they pay ?  Or just show zero?  

Not trying to be a hard case here but I do find some irony (maybe not the right word but it will do for now) here.

Cheers

 

Permalink Reply by Philip Thackray on February 1, 2014 at 1:18pm

FMV,

They show the sales price on the check stub.  They would have to pay that.

Phil

Permalink Reply by Philip Thackray on September 3, 2014 at 11:29am

Royalty Update:

I have been following the Rex Lamperski well pad production and royalties via royalty check stubs that a friend has been providing to me.  After a few months production, the deductions from the sales price are running at about 17.5% which is in the ball park of estimates for deductions that I have seen.

LewPA - If you are willing to share your royalty information, are you seeing similar deduction percentage numbers for the Stebbins unit that you are in?

I am in the XTO Marburger B unit which went on line October 2013.  As I posted earlier in this discussion (top of page 4) XTO has been netting the NGL sales to zero.  The pipeline that I mentioned in that post is completed and NGL deliveries from the XTO Hicks Road cryogenic plant to the MarkWest Bluestone plant began in mid-June.  I will see a full month (July) of production and deduction data using the NGL pipeline later this month.  I will report on deduction percentages for XTO at that time.

Phil

Permalink Reply by LewPa on September 3, 2014 at 8:39pm

 Phil,

2014 royalties have averaged 17% untill June. April statement (which is Feb gas) was the lowest at 13 1/2%, that was when gas sold for $6.00 per. Pleasant surprise in the June statement, they refunded all of the deductions that they had taken out since the well went into production in Sept 2013.I guess somebody finally actually read my original Phillips lease. Ever since no deductions at all, which is good with how low the price has fallen of all the gas products. LewPa

Permalink Reply by Philip Thackray on September 4, 2014 at 6:51am

Lew,

How did an old Phillips lease end up with Rex?

No deductions - that is great.  I've seen you mention lawyers Wil White and Amy Malloy here on GMS, were either of those helpful in getting to no deductions?

Regards,

Phil

Permalink Reply by LewPa on September 4, 2014 at 9:02am

 Phil,

As you know XTO bought out Phillips. Rex traded or bought a whole bunch of lease ground right around the Butler airport in late fall 2012 including me. The Stebbins well was already drilled but not fracked when they acquired my lease and put me in the unit. My original lease term expired in Feb 2013 and I used both Wil and Amy the rest of the summer trying to get out of the lease because of no production from the well to no avail. The well was fracked late summer 2013 and went into production in Sept 2013. I had talked to the legal dept at Rex myself about the deductions being taken out and that's when I got the phrase IF IT DOESN'T SAY WE CAN'T WE CAN whipped on me. I gave up on it and fell in line, out of the blue 8 months later came the refund and change of heart!  LewPa

Permalink Reply by Philip Thackray on September 4, 2014 at 12:41pm

Lew,

My XTO lease in the Marburger B unit is the old Phillips lease.  Maybe I should call Wil or Amy to discuss that?  I got a new lease from Rex for the Ferguson farm earlier this year so that no longer has the old "Phillips lease" type language.

Talk to you later,

Phil

Permalink Reply by GM on September 4, 2014 at 4:19pm

I also have " the old Phillips lease". I find your discussion's regarding this very interesting.

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