Utica / Point Pleasant Royalties Per Month

Hello All, question:  How much money per acre/per month are these folks in Carrolton county getting for their royalties?  I know all wells will be different, some with wet gas, others containing oils.  I'm just looking for a good average.  I'm only 29 years old and sick of working...  trying to determine if I can quit my job now...  Hopefully they don't hit a dry well behind me.  (of course, I'm kidding)

I'm in Southern Mahoning County, but I want info from Carrolton Co.  

Cheers! 

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Permalink Reply by Big D on July 21, 2012 at 1:57am

Interesting facts, I appreciate it

Permalink Reply by Kathleen on July 21, 2012 at 2:22am
Hi. I personally like CHK after seeing a few of their pads and I'm leased by them but I worry about their investment presentations :0) What the real well decline is would be one concern when it comes to their numbers. I do like their numbers though and they are fun to read. The other report listed on this thread uses low market numbers and I hope chks market numbers are more accurate but I do remember about 17 years ago oil was very low.
Permalink Reply by Big D on July 21, 2012 at 3:39am

If you numbers added up....  the well itself would never be worth the investment, even if the well produced for 500 years.  The units are 160 acres per well.  

Permalink Reply by Big D on July 21, 2012 at 7:08am

perhaps you are correct.  It would be great if someone would post their monthly royalty statement on here...   gas prices will increase 3 fold once the large coal fired boilers are converted to burn shale gas.  which is good and bad, at the same time...

2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 21, 2012 at 8:15am

SGJ,

I won't say that I completely follow your analysis above.  What are you using for the price of NGL's?

Permalink Reply by Jim Litwinowicz on July 21, 2012 at 9:00am

SGJ: Those are interesting numbers but you missed out on one thing.  All those numbers are based on a single well and the units are in the range of 177 acres to 200 acres.  Since the average well will drain 80 to 100 acres, the royalties will double once the second well is drilled. Of course, if they change the unit size to 640 or 1280 there will be a corresponding drop in royalties until all wells are drilled.

And while nat gas is at $3/MCF now no one expects it to remain there long. Futures put gas at $4 and even to $5 or $6 in a few years.

2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 21, 2012 at 9:16am

Jim,

Currently, the next 36 months of forward pricing on NYMEX average $3.80.  $5 or $6 is a long way off. 

As for liquids prices, SGJ appears to be using $60bbls for liquids pricing.  In a descending order of magnitude, with the higher quantities being listed first, here are OPIS prices for liquids that are contained in generic natural gas streams.  Ethane and propane constitute the vast majority of an MCF of natural gas, and as you might expect with being the most plentiful, they fetch the lowest prices.  The two most prevalent components average approximately 22% of WTI Crude prices (currently $84/bbl) which would put these two liquids at +/- $18.50/bbl by my calculation.  A far cry from $60/bbl

Ethane C2…..     % of Crude Price (17.70%)

Propane C3…    % of Crude Price (29.95%)

N. Butane NC4 % of Crude Price (68.86%)

Isobutane IC4…% of Crude Price (72.70%)

 

http://opisnet.com/market/samples/OPIS_NGL_Forwards_Report.pdf

2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 21, 2012 at 9:46am

Yes sir.... that posting is a composite average of all the individual components which does not account for different amounts of products.

Also, those are hub prices and does not account for the transport required to reach that sale point, or the discount that purchasers of NGL's pay in the Utica/Marcellus area.

Or explained differently, that posting you are looking it is a straight arithmetic average, as opposed to being a weighted average.

2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 21, 2012 at 10:00am

But, if it makes you feel better to operate with an incorrect set of data points, be my guest. 

2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 21, 2012 at 9:52am

Its similar to the situation where the posted NYMEX crude price is $84, but crude oil prices in the Bakken are some $20 to $30/bbl less. 

Its called Location Location Location

Permalink Reply by Kathleen on July 21, 2012 at 11:46am
Steve,
I got a question on this point. If your lease says from, at the well head, arms length would the bakken folks still get $20 to $30 less or are you talking about a net lease where I would imagine location really matters.
Permalink Reply by Jim Litwinowicz on July 21, 2012 at 1:00pm

Nat gas futures for two or three years from now show ~ $4.25/MCF. And if the conversion of power gen and transportation continues to accelerate, nat gas will probably be higher. Add in all the LNG export terminals to that equation.

http://data.tradingcharts.com/futures/quotes/HH.html

Most of us will get royalties on even our first well at least two or three years from now. And people with a well now will get many more wells drilled years from now.

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