Help Reading TRRC Info Please

[Wilson_Inc]

Three Questions:

1) 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 answes this question but any more insight will be appreciated.

Production and Total Disposition

Disposition Details

County Production

12 results Page: 1 of 1 Page Size: Date OIL (BBL) Casinghead (MCF) Production Disposition Production Disposition Jan 2011 209 168 210 210 Feb 2011 191 171 210 210 Mar 2011 213 338 210 210 Apr 2011 183 175 210 210 May 2011 194 167 210 210 Jun 2011 133 165 182 182 Jul 2011 56 0 105 105 Aug 2011 166 165 156 156 Sep 2011 182 168 210 210 Oct 2011 172 167 210 210 Nov 2011 106 167 210 210 Dec 2011 146 171 210 210 Total 1,951 2,022 2,333 2,333 2) 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. 3) 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.

[Ben_Elmore]

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 elase (the old Producer 88 forms that lessee's 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.

[Wilson_Inc]

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 elase (the old Producer 88 forms that lessee's 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.