What are we missing here? What are we overlooking?

If the gas wells seem to deplete so quickly (as it appears to be the case with many of us), then how will there be enough gas to justify all the pipelines and processing plants are they are being constructed? What do the operators / companies know that we don't? 

When I originally leased, I was told royalties would stay high for 4 years before they dropped off. I've had a big drop less then 2 years into this. I've read before that these wells would produce for 20 plus years. That seems to be way off now.

Even with all the new wells being drilled, if volume drops so fast, then how will there be enough gas to sustain these plants such as the ones MarkWest is constructing.

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Mike MurphyPermalink Reply by Mike Murphy on July 12, 2015 at 3:38pm

WE are not looking at 15 to 20 year old wells we are looking at horazonal wells drilled 4 or 5 years ago with old frac technology and also if them 15 to 20 year old wells were fracked use technology from way back then I am sure there is refrac possibilities in them GEOLOGY 102   those wells only recovered less then 25 percent of the reserve

Permalink Reply by Tim Tarr on July 12, 2015 at 6:28pm
Just make sure that decline is from lower production and not lower prices! I haven't seen a sharp decline in production but prices are 1/3 of 2 years ago.
Permalink Reply by Joseph-Ohio on July 13, 2015 at 12:44am
Need more customers to purchase the abundant Natural Gas resources both domestic and foreign - first domestic.

More domestic Natural Gas power generation.

More domestic Natural Gas transportation - freight hauling (waterways, airways, rail, truck, automobile, buses) which all await infrastructure (fueling stations / innovative fuel trains for conversions, conversion kits, perhaps government subsidy to make it happen).

More foreign markets and shipping terminals.

That all takes commitment / leadership / a grand plan and government cooperation to see to making it happen.

Ought to reserve gasoline and diesel for the military and very small engines in the private sector.

That would (begin to) sound like a plan to me.

T. Boone Pickens has it right.

We ought to draft him to run for Pres.
0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 5, 2015 at 1:34pm

Zack,

   Compare your well production against the ODNR Quarterly reported production.

That will tell you if you are being short changed.

Permalink Reply by Zack Jameson on July 5, 2015 at 3:10pm

I'm basing a lot of this on my royalty check. I'm less then 2 years into this and it's dropped from $1300 per acre to around $185 per acre. Thank goodness there's 11 wells in my unit.

Permalink Reply by Joseph-Ohio on July 5, 2015 at 9:01pm
Seems to me you are one of the fortunate in all of this.

However, can you see how the things that I've written above might be the reasons that things are as they are ?

I wish you and all of us much / the best luck.
Permalink Reply by Kyle Nuttall on July 7, 2015 at 3:29am

It's possible that that drop off is due to all the factors that everyone else has mentioned.  It's also possible that the company is taking out post-production costs.  If you think that the volume of gas produced can't account for the change in dollar amount, check for deductions.

Permalink Reply by Zack Jameson on July 7, 2015 at 8:04am

I don't have deductions of any kind taken from my royalty. The price of gas is the reason for the fall in royalties.

Permalink Reply by Kyle Nuttall on July 7, 2015 at 8:17am

Man, that's a big drop off.  Good job getting no deductions in your lease, though.  Some companies are really tight with that kind of language.

Permalink Reply by Undecided About Oil on July 8, 2015 at 11:17am

Ron,

 Is there actually any audit performed by ODNR as to the accuracy of the numbers provided by the O&G companies? If not then how can we trust that the ODNR numbers are accurate? There is no transparency here at all ...

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 12, 2015 at 4:35am

Zack,

     Forget using the ODNR production reported by Chesapeake, the numbers weren't verified by the ODNR, and were taken using the Honor System.

I could say something like the old joke: "Naval Intelligence", those two words should never be used in the same sentence."

Permalink Reply by bo boboski on July 12, 2015 at 6:30am

You could use the term,"NASAL intelligence", as in "I smell a rat"!

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