Is American Energy paying less than HG for same contract? Gross vs.Net?

Does anybody know why AEU payed on 3.17 per MCF in August compared to HG paying on 3.93 in July. Since our original contract was with HG, does AEU not have to honor the HG contract?

Is one paying net and the other gross?

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Permalink Reply by Dexter Green on September 29, 2014 at 3:10am

Price depends on the contract negotiated by the producer.  The variability between one producer and another can be enormous.

Permalink Reply by Tennessee on September 29, 2014 at 3:19am

Thanks, Dexter Green for your reply.

Our lease was with HG. American Energy bought HG. Shouldn't they be bound by the same agreement? We haven't negotiated anything with AE.

Any input on this would be appreciated.

Permalink Reply by Dexter Green on September 29, 2014 at 3:50am

They're bound to pay you in a manner that is consistent with the lease.  But the price you are paid is coming from the price that they are paid, which is based entirely on their own contracts with the commodity buyers. 

Permalink Reply by Harry E. Rose on September 29, 2014 at 4:40am
Tenn., Was the market price the same in both months?
Permalink Reply by Tennessee on September 29, 2014 at 4:55am

No, it fluctuates daily, but it was never as low as $3.17.

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