I just received a negative balance report from ConocoPhillips. They failed to deduct for “gas lift” from September 2018 to October 2023 resulting in an overpayment of several thousand dollars. What is gas lift and why would that affect my payment? Thanks so much!
Gas lift is a process of injecting a portion of gas produced into increase pressure so more fluids flow to surface. This gas was not sold and royalties are not paid on it. Ultimately the injected gas recycles back out and is sold and royalties are due at that time. Apparently there was a mixup between the production and accounting departments and you were paid on all the gas instead of just the gas sold. Conoco will recoup the overpayment out of your monthly royalties. How long this will take depends on current production and prices and your total royalties. You are not obligated to repay Conoco and should refuse if asked to do so. Here is explanation of gas lift - Gas lift - PetroWiki
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Thank you for your reply! I appreciate your help!
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