Royalties dropping off cliff

In early 2nd year of royalties. It was warm in December figured. January check would be higher but its half amount of December.  Do these wells drop off that that quick? Before the first year even ended the checks dropped about 40%

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Permalink Reply by Nancy Mosley on April 5, 2022 at 10:28am

Wells do drop off a lot after the first year or two.

Generally, royalty checks are for production more than a month before, so not reflecting what is happening right now.

And, some companies hedged their prices (I only sort of understand) so the prices might have been set months ago.

Permalink Reply by adam sorell on April 5, 2022 at 1:56pm

Yes. I just got January check today.figured with ng prices ripping and weather gettung colder my jan would be higher than december not 45% less!

Permalink Reply by Nancy Mosley on April 5, 2022 at 2:47pm

Maybe it was hedging. I haven't analyzed my recent check, which also includes Jan 22, but it is less than the previous one. Agreed.

Permalink Reply by paleface on April 6, 2022 at 2:47am

Seneca (412-548-2566 )  Seneca ( 412-548-2559 )  The MCF they are paying is where the problem is.

Permalink Reply by adam sorell on April 6, 2022 at 11:40am

Under column GMI ITS $4.23/1.00. I guess itsat  $4.23 per mcf.  henry hub today is $6.33.  I have to find earlier statement to check volume. Would they be choking well bsck for any reason?

Permalink Reply by adam sorell on April 6, 2022 at 12:24pm

Never tried to figure out statement .trying now.

How come there are two different decimal disbursement numbers? Isnt that my portion of the unit? Number should not change.what am i missing?

Permalink Reply by adam sorell on April 6, 2022 at 1:05pm

75% decrease on volume from jan 2021 to jan 2022. That dont seem right

Permalink Reply by paleface on April 6, 2022 at 4:51pm

Middlebury to Chatham Townships  Tioga Co. were PAID $3.00 an MCF..

Permalink Reply by adam sorell on April 6, 2022 at 5:31pm

The price was $2.36 in Jan 2021.

Im not challenging the price per mcf.  Im shocked at the 75% decline in volume in only one year. Unless well had problemsand was offline for a few weeks.  If it wasnt a glitch this well is a bust

Permalink Reply by Joe C. on April 7, 2022 at 1:02am

Do you have a net lease or Gross? If net, is the operator taking more post production cost out? Were the wells shut in for any reason? These are questions you need to ask the operator. Without seeing statements, it will be hard for anyone to help answer your concerns. 

Permalink Reply by Pumpkin Farmer on April 7, 2022 at 1:52am

Is there a newer well nearby that could have impacted the production?

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