A few months ago Continental Resources bought the lease I contracted to Camino. I was surprised but figured it wouldn’t be a problem. However, when I started receiving the royalty payments from Continental they were all about 25% less.
I found out Continental is a “two stream” company; implying they do not do anything to gas after it leaves the well head. So the question is who does process gas after it leaves the well head? I contacted Camino and asked if they are still processing the gas and if so, why haven’t they been sending process plant issues. Haven’t received anything from them yet.
A couple of comments, CLR could be charging much more for processing than what the previous operator did so check your lease agreement for compliance.
Second, if CLR is not separating the liquids from the gas stream and selling then the BTU value should be much higher than base Henry Hub dry gas value. Check prices against the EIA spot price.
Sometimes these operators are less than honest. Ovintiv was sued and had to cough up significant money to the royalty owners.
Camino said they are also a two stream company and are don’t do any processing themselves, however they are paid for the processing. My monthly revenue receipts always came showing gas, oil, and plant products. How does that work?
The Continental revenue statement showing June price was $1.90, and I did not get anything more except for oil. Why do you show the 2 different volumes of Continental gas? Does that imply they should have included the liquid price as Camino did?
Not sure why Continental is not separating the liquids from the gas stream. The “wet” gas well I have with them does only slightly better price wise than the Henry Hub price. The “dry” gas well I have with them does considerably worse price wise than the Henry Hub price.
The last check I got from Camino Production @ Feb. 2023 showed Gas @ 1.2850 BTU, 26.4K Volume, $464 Price. Also Plant Products - 134K Volume, @0.66 Price.
But the Henry Hub @ about $2.50. How does that all say about Gas, Plant Products, Dry Gas, wet Gas?
Camino, Gulfport and Marathon all sell the natural gas liquids and report them on the statements I get. Their BTU factors are 1 or very slightly above. Continental does not breakout their natural gas liquids. Their BTU factor is 1.1+ on one well and .986 on the other well.
With Camino I was paid for Gas, Oil, and Plant Production. When Continental bought the lease from Camino I get Gas and Oil only. There was little difference in volume or price of gas between Camino and Continental.
When I contacted Continental they said “We are a two stream company and you’re being paid Well Head gas.” Sounds like they are not going to pay me for anything about plant products because that is not “Well Head gas”.
@Brock_Presgrove Continental takes over 65% of Royalties for their post production costs. Unfortunately every one of us who have to now deal with Continental are experiencing the same issues and getting the same answers.
Are you saying that Continental Resources can ignore a “Cost Free” clause in a lease agreement? Or do they arbitrarily just stop and wait for someone to challenge them?
@Brock_Presgrove So far Continental is not honoring the leases that they took over from Chesapeake that I and my family have. They’re requiring us to prove what’s in our leases. So yes they can ignore it and you must challenge them. We’re in the process of getting an attorney. We’re not the only ones this has happened to, there are numerous cases against Continental for this same practice.
That is encouraging. Sounds like it’s nothing new. Has this been their practice for a long time? Or is there some new guy at the helm and trying to prove himself? I will send a copy of my lease agreement and see what that does.
