My royalty payments were very good during COVID. Have decreased significantly- but seem to be on the way up again but not as much as they were in 2020. I’m wondering why.
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Several items of note are happening. All wells naturally decline as production drains the reservoir. Think of a balloon with a pin hole in it. It will gradually deflate. The other main issue is the change in prices for both oil and gas over time. Declining prices with decline volumes makes lower royalties. Rising prices with declining volumes may or may not equal declining royalties depending upon how much the prices rise. OIl prices have risen in the last few months. Gas prices are really low right now, but expected to rise over the next few years.
The war in Ukraine caused high prices due to gas exports and the oil prices rose due to the rise in demand after COVID
Here are some charts that might help you.
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What happened is Joe Biden!
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Yay for President Biden! We have a lot of new wells in production and my stock portfolio is doing great. Four more years!
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