Hello Guest
Landowner Rights Denied By Moratorium      NY: 10 Years, 2 Months | DRBC: 9 Years, 5 Months
YOUR SUPPORT KEEPS US OPEN       
       More Information

Natural gas storage payment question

  • 22 Replies
  • 6175 Views
*

aubrey

  • 14394
  • NEWBIE
Re: Natural gas storage payment question
« Reply #15 on: May 15, 2010, 03:34:15 PM »
no idea on full development bill, not really concerned about it either. im betting 2 per pad will fill the 1 bcfg/d bill. chk doesnt even know at this point.

think about what you said there, "This is a pretty good deal compared to conventional storage; at least this way we get paid"

will you? how so? you will get paid for gas, yes, but what doesnt flow will sit there, stored, at what compensation?

now im not saying this will be an all bad thing. i'd rather it sit there if prices are low, and flow when theyre high, but consider this scenario if you will.

aubrey takes a contract in june, when gas is $4 per mcf, con ed hedges it and aubrey finances.

the delivery date will be dec. when the price will be $6.

your well ships additional gas starting dec 1

when will you get paid? and what price will your royalties be based on?

i dunno...

wj

CHANGE IT BACK!

*

virtuallyme

Re: Natural gas storage payment question
« Reply #16 on: May 15, 2010, 03:41:01 PM »
starting to sound a lot like those gasoline stations you and hump were talking about in another thread  ::)

*

aubrey

  • 14394
  • NEWBIE
Re: Natural gas storage payment question
« Reply #17 on: May 15, 2010, 03:44:32 PM »
well you know me virt, im weird...and apparently obnoxious.  :D

but from the beginning some of the weirdest scenarios we came up with turned out to have some merit later on.

really im wondering how it works. think any industry folks will fill us in?

nah, but i bet ya hump says "wj, you are endless! go get some facts!"... :D :D

spoutoffman
CHANGE IT BACK!

*

g592314

  • 2660
Re: Natural gas storage payment question
« Reply #18 on: May 15, 2010, 04:16:55 PM »
I guess the next question is this: is the 1BCF a realistic number?  Might it be more...   Sounds like some research on usage will be required.

As far as not getting paid in the months where gas isn't flowing, I'm not too worried about that.  It doesn't need to be a steady income. 

I too, worry about the pricing.  It's always bothered me that chk gets paid based on a hedged price, whereas we will be paid at market price at the time of delivery.

*

aubrey

  • 14394
  • NEWBIE
Re: Natural gas storage payment question
« Reply #19 on: May 15, 2010, 04:35:06 PM »
i dont think ya got what i was getting at there, but thats ok, it might not be anything worth considering anyway.

wj
CHANGE IT BACK!

*

g592314

  • 2660
Re: Natural gas storage payment question
« Reply #20 on: May 15, 2010, 06:27:36 PM »
?

*

Vawter

  • 656
Re: Natural gas storage payment question
« Reply #21 on: May 18, 2010, 09:29:52 AM »
I'm thinking WJ is 100% correct. Our lease does not allow traditional storage. We do however get a whole $5/acre/yr shut-in allowance while Aubrey is using us for shut-in storage.

*

aubrey

  • 14394
  • NEWBIE
Re: Natural gas storage payment question
« Reply #22 on: May 18, 2010, 06:30:11 PM »
that'd be the worst case vawter.

more likely, they'll produce a little from all wells just to keep the wells open and turn em up when they need the gas.

im just speculating of course as usual, but its always nice to know just how little grease they can use if they need to.

wj
CHANGE IT BACK!