Replies to This Discussion

Permalink Reply by Jed Clampett on June 4, 2014 at 4:36am

Must be for the Jet Fuel for the corporate planes. 

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Permalink Reply by Tom R on June 4, 2014 at 4:51am

They use some of the gas the well produces to run some of the equipment on the pad. It's usually at least a dehydrating unit ( a gas fired heater ) to remove moisture from the gas stream and prevent freezing out of ice in the pipeline connection point. May also use it for other purposes like running pumps or compressors, but I'm not in the business and am less sure of that. Chesapeake recently started showing the fuel deduction on my royalty statements but other partners had been showing it from the start of production. It is a fairly small amount, from what was reported varies between a half a cent and two cents per MCF depending on month and price of gas.

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Permalink Reply by Jim Litwinowicz on June 4, 2014 at 11:28am

This is something to keep an eye on. All of these companies and their sub-contractors are rapidly converting their equipment to run on nat gas instead of diesel. Compressors, drilling rigs, generators, fracking pumps and much more all use a lot of fuel.  Doesn't seem fair that they should be allowed to use it free.

It would be a major loss to the landowner/rights owner.  They may go as far as converting trucks, earth moving equip, pipeline trenchers, every piece they have.  And if they get free use of the nat gas,what would stop them from using gas from one well to power equipment while they drill on pads up to ten or twenty miles away? 

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Permalink Reply by joe on June 4, 2014 at 11:49am

The couple of times I've seen this on our stub it has been a negative deduction, and actually added a couple of bucks to our check. For example, last check had deductions of $54.31 for gathering, $6.45 for transmission, and $-4.75 for fuel, for total deductions of $56.01.

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Permalink Reply by craig on June 5, 2014 at 4:27am

A family member also reports a negative deduction for fuel too, which is actually a plus for the royalty owner, as joe states.

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Permalink Reply by Jeff Kerr on June 6, 2014 at 12:28pm

chesp took over 200.00 in deductions from our little 5.7 acres that is rape. DEPenn said pennies on the dollar  they lied. 

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Permalink Reply by Doug Duffield on June 4, 2014 at 12:52pm

They don't use fuel from an individual pad to power equipment, Cabot buys gas from the Williams line to drill and Frack their newer sites, that gas has already been metered and royalty owners paid.

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Permalink Reply by wyalusing jim on June 5, 2014 at 2:59am

duffy is correct about cabot purchasing the gas that they use for frac'ing, however so is tom r. in that the dehydrators use gas directly from the wells.

cabot has also begun replacing their solar equipment with gas powered electrical generation on pads for the electricity necessary to run meters etc. those will only consume a very small amount of gas though.

wj

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