Gas question

North Dakota Mineral Rights Williams County, ND
1

What determines if they sell gas from a well?

2

Ron,

I would say the 1st thing you need is a pipeline. A lot of pipelines are needed in North Dakota. Then you need a gas plant and a purchaser.

Clint Liles

3

Ron, I think it can be summed up by 3 things, market/someone to sell to. Infrastructure/gathering pipeline nearby with extra capacity otherwise the operator will have to put in his own line. Whether the state will allow them to flare the gas. ND usually only lets the operator flare off the gas for a limited time, possibly up to a year with extentions.

4

YOUR President disagrees. I wonder why.



Clint Liles said:

Ron,

I would say the 1st thing you need is a pipeline. A lot of pipelines are needed in North Dakota. Then you need a gas plant and a purchaser.

Clint Liles

5

Gary,

No, no, no, that's Charles Mallory's president. TeeHee

Clint Liles

6

On the ND Oil & Gas web site it shows wells that are producing oil and some show gas sold. Does that mean those wells are different than others and are able to sell?

7

Ron, other than all wells being different from each other, I don't think it's the difference between the wells except some are close to the infrastructure pipeline so they can sell gas immediately after they are drilled and some are far away and have to wait for a pipeline to be built so they flare gas until then. I believe that with extentions that the state of ND will allow flaring for up to 1 year. They can't produce the oil in quantity without producing the gas or they wouldn't waste it. Not being able to sell the gas due to a lack of pipline or market, they have to flare it. I know it sounds strange, a friend of mines recent well probably flared off $250,000 worth of gas in 3 months. I believe that the operator gets to deduct the flared gas as a loss but the mineral owner lessor can't. I'm fairly certain that the state isn't collecting taxes on the flared gas either.

Ron said:

On the ND Oil & Gas web site it shows wells that are producing oil and some show gas sold. Does that mean those wells are different than others and are able to sell?