How do we actually know how much gas is being produced? All we get is a statement from Kaiser Francis. The lease is so old we don’t even know what royalty we get. Can this be renegotiated? Thanks, DF AGEE, Agee Gulch, Craig, Colorado.
David, I actually own a natural gas measurement company in Midland and was previously a partner in an exploration company. All gas wells are metered either with EFMs or dry flow meters. The metering is pretty accurate, with little chance for other than minor error other than interpretation by the integration company in the case of dry flow meters and calibration errors on EFMs. The meter data is converted into MCFs using an industry standard equation and reported to the state regulatory agency on a monthly basis.
Your royalty check stub should show gas volume on it which you could compare to the data on the state site.
The oil & gas lease that you are subject to is filed in the county clerk’s, or register of deed’s office in the county courthouse. It will state the royalty on it and is not renegotiable.