Three Questions:
- What does the Production and Disposition (in the table below) of the oil mean? What is the difference?
After posting my question I found this on the TRRC ‘HELP’: What are disposition details? Disposition details provide the breakdown of the various ways oil or gas leases dispose of their products. These are provided only when doing a Specific Lease Query. As you move over the code columns, a definition of the code appears. You can also read the code definitions by clicking the Disposition Codes link on the Disposition Details screen.
So, I think that answers this question but any more insight will be appreciated.
Production and Total Disposition
Disposition Details
County Production
- Why does no gas production show up on the royalty check statement?
After posting this question I read the ‘disposition details’ for the casinghead gas code descriptions (below) this question is almost answered.
- Is the gas not sold for the ‘code 2’ purpose? I never heard of a transmission line carrying free gas.
Casinghead Gas
| Code |
Description |
| 1 |
Lease or field fuel use – gas you use or give to others for field operations including lease drilling fuel, etc. |
| 2 |
Transmission line – gas delivered to a transmission line that will not be processed further before ultimate use, including gas used for industrial purposes, irrigation or refinery fuel, etc. |
What you have pretty much answers Question 1.
Question 2 - Casinghead gas should show up on your royalty check stub, as you should be paid for it (unless your lease expressly provides you are not to be paid, which is unlikely). However, given the small amount produced based on your numbers, it is possible the lessee is using the casinghead gas for its operations on your lease. What is the disposition code each month for the casinghead gas? If it is 1, then that’s what is happening. In that case, you would not normally be paid for lease use gas unless you expressly provide for it in your lease (the old Producer 88 forms that lessees like to use provide you will not be paid for it). If the disposition code is 2, you should be paid for it. See next answer.
Question 3 - Code 2 does mean the gas is sold to the owner/operator of the transmission line. This is gas that does not need to go to a processing plant to remove impurities or liquid products before going to sales at the downstream market. For purposes of your lease, most likely your royalty is based on the sale at the mouth of the transmission line.
Others may have more to add.
I looked for the disposition code for the gas and it is code 1. Mystery solved. Thank you Ben Elmore.
Ben Elmore said:
What you have pretty much answers Question 1.
Question 2 - Casinghead gas should show up on your royalty check stub, as you should be paid for it (unless your lease expressly provides you are not to be paid, which is unlikely). However, given the small amount produced based on your numbers, it is possible the lessee is using the casinghead gas for its operations on your lease. What is the disposition code each month for the casinghead gas? If it is 1, then that’s what is happening. In that case, you would not normally be paid for lease use gas unless you expressly provide for it in your lease (the old Producer 88 forms that lessees like to use provide you will not be paid for it). If the disposition code is 2, you should be paid for it. See next answer.
Question 3 - Code 2 does mean the gas is sold to the owner/operator of the transmission line. This is gas that does not need to go to a processing plant to remove impurities or liquid products before going to sales at the downstream market. For purposes of your lease, most likely your royalty is based on the sale at the mouth of the transmission line.
Others may have more to add.