Thank you for your comment.
Are unit prices (say, $6.8/MMCf, $4.7/MMCF) consistent or do they vary?
Mine vary from month to month and funds are not predictable or consistent.
Price varies, production varies, deductions vary among other things. Do not make any financial decisions or commitments based on expectation of revenue over time.
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Excellent Advice!! Truth!!
Do you check production quantities and rates posted on the state website with the royalty statement?
Hi Ancel, I had the same question last year in our first year of production. My leases are with Southwestern Energy and their reply was: “The State of West Virginia DEP requires production companies to report total raw gas as measured at the wellhead. This number is different than the processed residue gas that is marketed and used to calculate the sales for which we record our revenue and the resulting royalty owner share.” There is a loss in volume from the actual wellhead total in the production/processing before it goes to market. Perhaps someone in the industry can comment on the exact details of how this transpires. On one of our wells there was a significant difference and after inquiry I was informed that another company, Equinor, had a share of that well. After contacting Equinor they have now paid RI they owe. So it is good to check the WV state numbers on the DEP site. The 4th quarter of 2021 was just posted last week. Hope that helps.
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gas at the wellhead varies in composition. In most of the Marcellus the gas is “wet” meaning it is not just pure methane. At the wellhead the volume is recorded with all components left in. Some pads can strip out liquids on site but most is done at the plant which is reflected on your check as PP (plant products). Plant products refer to ethane, butane, propane, etc. Once those components are stripped out of the gas, what remains is pure dry gas (which is the price you see on the news), the volume which is less than what you started with. Liquids (plant products) are worth a premium to just dry gas, usually reported in gallons so have to multiply by 42 to get the price paid per bbl.
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