I would like to add some discussion as to what is currently being paid by the gas companies for oil and gas at the wellhead. We all strive to get "gross proceeds at the wellhead", but what does that really equate to. Since our leases address the percent of royalties we receive, mostly is does not explain the formula used to determine the payment for gas in mcf or oil in barrels. Most have heard of Henry Hub which are daily values for gas, I would doubt anyone is getting paid the daily rate Henry Hub posts. On my last royalty check for December 2014 I was paid $1.65 per mcf which was about 30% less than the Henry Hub value for nat gas at that time. I have a conventional Benson well with a 15 year old lease that contains no deductions (or at least deductions are not printed on my check stub). Hmmmm.
Lets see if we can follow the money. We know the larger energy companies also own, partially own or hold significant portions of stock of several other companies to which your gas and oil is sold. That means if they sell your gas at a reduced amount to their sister company at the wellhead, the sister company can be very profitable. For example: Yourpaid Energy Company sells your gas to Yourpaid Production Company, at a reduced rate per mcf. Yourpaid Production Company produces the gas from the well and sells your gas at the wellhead to Yourpaid Midstream Company. Yourpaid Midstream Company sells your gas to Verylittle Processing Company. At the end of the day your gas is sold to Yourpaidverylittle. Sounds like 1897 all over again.