What is the current price / MCF of natural gas?
What would you guess to be the average initial production of a Marcellus well in say Washington, Pa.Is there much variation between wells in the same general area since they are tapping into the same formation with the same thickness.
What is the difference between market price and/or NYMEX Spot price and "arms length transaction"?
Another calculator is on Geology.com website. No idea how accurate it is though.
does this sounmd right? please tell me where the math is wrong
If my well reports "Equivalent" 5000bbl/day for daily production
@$90/bbl x 5000bbl/day=$450,000/day gross income for the well
if my pool is 640 acres= $703/acre/day
I own 1 acre in the pool @ 20% gross royalty
at that production rate?
The math looks good, but $90/bbl will likely overstate the royalty. You'll need to know the components to get a closer estimate. Best guess today: NG @ $3.70/MCF, Oil @ $87/bbl and NGL's @ $40/bbl. As I'm sure you know, these prices are a moving (rapidly) target!.
"Equivalent" is converted in BTU's and is not necessarily a close approximation of price, especially if NG represents a large component of production.
What's the difference between Condesates and NGL's?
got any Idea how (the processor) tracks the components (from the well head)
Each O&G company tends to report production differently. I can't explain why. Generally, "condensate" is oil and NGL's are natural gas liquids. Oil is separated out at the well site. NGL's are separated from the natural gas stream at a processing facility and further broken down into components at a "fractionator". NGL's are the most difficult to price because components will differ at each well. $40/bbl is a decent current guesstimate. Further complicating matters in SE Ohio right now, ethane (~50% of NGL's)( which is further processed in a "cracker" to ethylene, which in turn becomes feedstock for a myriad of chemicals/polymers) has no way of getting to market. This situation won't be remedied until 2014.
Confusing? Absolutely. As far as tracking components, it's a matter of "trust them!". The only good news is that the O&G's have the same incentive as landowners to make certain reporting is accurate.