I have minerals in West Virginia but maybe this is a question for any owner. Have your royalty checks declined over the past several months? Is it because production is being reduced? Or the economy situation? Maybe just in WV? Trying to figure out if I need to plan for a continuation.
I have checks coming from EQT and Tughill - both are declining -
Hi Alice! I also have noticed a significant decrease in my royalty checks. My wells are in Oklahoma. I don’t know why but I am also concerned.
Wells normally decline over time-think of the air being let out of a balloon. The pressure declines and the reservoir empties as much as it can given the pressure needed to lift it to the surface. Many hydrocarbons are left in the reservoir stranded unless pressure is supported.
Also, prices have declined significantly since December. Declining product amounts combined with declining prices gives declining royalty checks. This is very normal.
As far as the Appalachian basin is concerned, there is limited pipe transport out of basin that prevents producers from drilling more or benefitting from higher prices out of basin. It is always matter of location within the basin. As a result of limited capacity the gas sells at major discount to Henry Hub. The negative basin results from limited access to large population areas.
EQT has Appalachian production which cannot be moved out with the limited pipe capacity. Appalachian Basin discount has been about $1 for a year. When you consider the average Henry Hub price for the 2023 year is $ 2.42/Mbtu. That $1.00 discount is a significant reduction of 41% of the Henry Hub average price for 2023. IMO, that is certainly one of the reasons for the weak checks coing out the basin.
It took a direct act of Congress to get the MV Pipeline back on track to completion. The pipeline was shut down by the Sociallist Liberals that are in power after being 94% completed. They wanted to show just how GREEN they could be. So if anyone on this site is voting Democrat you are causing a lot of your own misery.
If it was up to me, I would shut in the pertinent production coming out of the Appalchian basin until the pipeline is complete to avoid the large discount to the normal pricing of natural gas. Of course, that isn’t going to happen since the operator’s stock share price would tank as well.
Bottom line, there are very good reasons for the shortcoming on the checks which are in large part tied to the pricing issues described above as well as demand issues during the summer months versus the winter months. Both summer and winter months set distinct peak level demand, but the winter eaks are always HIGHER than the summer peaks. So reduced demand in the summer does play some role in natural gas prices during this period of time.You are not being taken to the cleaners by the operator as their revenue stream is being negatively impacted as well.
The MV pipelline is scheduled to be completed by the end of 2023. Say thank you to the bums that are in power by voting them out in 2024… If they stay in power the oil & gas industry will continue to suffer greatly going forward.
IMO, the natural gas industry should play a SIGNIFICANT role as the transitional energy source that allows us to move towards greater use of renewables over the long haul (decades not years). Natural gas is the cleanest of all fossil fuels and can be transported worldwide when it is liquified. It needs to be the primary source of energy as we move towards a more sustainable and clean future.
This has been a public service announcement. You are welcome…
Thank you! This is helpful - since my checks have dropped a huge amount now - 95% in 4 to 5 months. We hadn’t gotten any calls returned or notifications helping us know if it’s temporary, political, fraud or ???
By the way Alice, you can also contact EQT as a lessor and talk to them about any questions you might have regarding your checks or other issues. The info below came off their website.
Contact Information for Royalty Owners - Tel. (412) 395-3328. Those who own gas royalties and oil royalties are an important group to EQT Corp. If you receive oil royalty or gas royalty from a lease under production by EQT Corporation , you can contact them at (412) 395-3328.
I have personally contacted them in the past and was favorably impressed with the way they answered my questions. I did not think it would be as easy as it was since I had been used to dealing with Chevron before my well was purchased by EQT. The interaction with Chevron was not as easy.
Hope this helps. Remember, they need you as much as we need them.
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