Gas company says we will be paid by decatherm…what does this mean? Not paid at wellhead…?? States the has has a BTU of 1.2… What does this mean? Is their a formula for this?
A decatherm is approximately equal to one million British Thermal Units (MMBTU).
In a perfect world, one million cubic feet of natural gas has the same energy (heating capacity) of a MMBTU.
However, the world is not perfect. Some gas has more value than others. Yours does, since the gas energy is approximately 1.2MMBTU/MMCF, instead of 1 BTU for each MCF. So, that is good news. It is about 20% richer than the standard.
Gas is produced by the cubic foot at standard temperature and altitude. It is sold by its energy content. BTU or decatherm.
PS. A btu has about the heating or energy equivalent of a burning kitchen match. At least it was over 45 years ago in high school.
Buddy Cotten
Thanks for the info…how do you calculate the 1.2 into the formulas to estimate royality?
multiply 1.2 times the henry hub price and you should be in the general ball park. With a BTU content of 1.2, then they may put in a gas processing facility and that would even give you more bang for your BTU buck.
Buddy
Good to know…thanks so much!