Royalties Plummeting at a More Rapid Rate - EQT Improvement under Rice Mgt?
Hello. It's been a while since I've been on here but I have a question for everyone I'm really curious about. Has anyone else noticed a sudden increase in plummeting royalty payments and market prices? I'm obviously not oblivious to the fact that the market has been steadily dropping for a variety of reasons and a lot of gas companies are dialing back production due to falling prices BUT the most recent market price seems to be twice the drop - at least in my area. We are with EQT; former Rice Energy landowners, and bought stock and fought to vote the Rice team back into management positions at EQT after abysmal performance and poor relations over the course of EQT ownership of former Rice leaseholds. We had - and still have - confidence in the Rice contingent to turn things around for EQT but are currently questioning if it will be advantageous for their existing landowners and producing units. This months' ridiculously low sales accompanied by apparent lack of interest in advancing existing producing units have brought questions to mind. We attended the EQT Land Owner meetings with Toby Rice and a lot of emphasis was placed on returning to existing pads and drilling additional laterals, thereby saving prep costs, increasing production, and lowering drilling costs. They cannot - of course - affect falling market prices, however we haven't seen any attention being paid to existing units, which seem to be being let to slowly (and lately NOT so slowly) fizzle out. Wondering if this is something others are noticing. It would seem to me - logically - that the most financially profitable would be to get the most out of existing units, thereby reducing drilling costs, during this slump in market prices, rather than going to the expense of developing new units and starting from scratch. Just not understanding what is currently happening and wondering if anyone out there has any insight or ideas. Our unit is only 3 yrs old and has had an accumulative 30% drop in royalties over the past 12 mos and a full 30% drop between just last month and this month, which was a complete shock. Curious what others are thinking, though I'm sure it's nothing good.
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Replies to This Discussion
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Permalink Reply by DESJR on
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Ours was about a dollar a unit less 1.39\2.30 but more production so we actually go more money. Since the spot market has been above 2.00 to 2.30range, I was really surprised.
I am still trying to get my monies from 2016 (fall) that has been in limbo. They keep saying that there was a problem when they merged and are working to correct it. I bet if they overpaid me it would not take 3 plus years to fix.
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Permalink Reply by Jeff Kerr on
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For OCT of 2020 EQT pd me ,70 cents per unit of gas WHAT A JOKE GOT MY CHECK TODAY COME ON ,70 CENTS WOW i SEE SOME GOT 1.43 PER UNIT last month royalties were 1.07 for sept. 2020 how come the big difference in price
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Permalink Reply by Lori Huber on
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You did better than we did. We sold at 66 cents. I follow the Dominion South Hub prices and they've been right on for a couple yrs, within a few cents so get ready for a worse selling price next month. Looks like it could be as low as 30 cents. Our gas is sold through the Dominion South Hub. On the bright side, it shows a sharp spike up over 2 dollars for Dec sales and on at least through Feb.
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Permalink Reply by Lori Huber on
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https://www.naturalgasintel.com/data-snapshot/daily-gpi/NEACNG/
This is how I get to it through NGI, which is a subscription. Try the link but if you can't get in, if you Google Dominion South Hub it will give you a list of sites that has the gas prices.
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Permalink Reply by Lori Huber on
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Permalink Reply by Jeff Kerr on
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Hi Lori wow this thru me for a loop. I see Lynn Mudder got a 1.43 per unit of gas What I can't figure is why such a big difference in price. Wonder if the low price is due to hedge funding ? or what. I wish I would have sold out before EQT bought rice.I sure hope it go's up as I don't know how they can stay in business at this price But again they did this to themselves flood the market what do you think would happen supply and demand Please keep me in the loop as I will do the same Thanks Jeff
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Permalink Reply by Lori Huber on
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Not sure about anyone getting higher sale prices other than luck or maybe hedged prices in their contracts. It's not Rice. EQT is actually one of the few gas companies still effectively operating. EQT would have gone under had Rice not taken over and reduced the pork and bloat in the co. It's the mkt. Prices are set and no gas company can sell higher than the mkt dictates. It's like anything else. Also, have to look what month they're being paid for. There are a lot of good industry articles to read to keep up on out there. It at least gives you some insight on what's going on. I do have fears of what may happen once this new administration gets in with their crazy green energy plans but they can never completely eliminate all fossil fuel use, despite their rhetoric. Just not possible and we who already have fracked wells SHOULD be safe. If anything, it should raise the price for our gas. But not thinking about that, yet.
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Permalink Reply by Lynn mudder on
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Jeff, the price you are quoting of $1.43 was from an old post. If you check the date it was from a year ago. We only received .70 on this months check, ugh! Now I will say something else. We have some old, small wells in Ohio. Same time frame but they paid us over $2! How does a small company get SOO, much more? This is a crazy business for sure.
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Permalink Reply by Lori Huber on
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