Oil barrells per day vs NGL's

General Mineral Rights Discussion
1

Is there a standard or general rule of thumb to determine how much in quantity and the price of NGL's generated per barrell of oil on a producing combo well - say in Montague County Texas. Is it based on the going price of a barrell of oil or the price of natural gas. Thanks

2

Please forgive my spelling typo. I know the correct spelling of barrel.

3


We have no spelling rules here as we is mostly country folks & so long as a word can be kinda figured out it's acceptable.

Richard Downs Byrd said:

Please forgive my spelling typo. I know the correct spelling of barrel.

4

NGL prices are most closely linked to oil price. NGLs have the most value when gas prices are low and oil prices are high (essentially stripping out heavier hydrocarbons from the gas and selling them as a liquid rather than as an enriched BTU gas). The price of the NGLs depends heavily on their composition (i.e. %propane, %butane, etc.). Ballpark figure would be 60-80% of WTI.

5

Thanks for the info. It seems like an opportune time to reap the benefits of NGL's. So if a combo well has 200 barrels of oil a day and a well has a 33 percent split between oil, NGL and natural gas then The NGL's would also be about 200 barrels a day but at 60 to 80% of what the price of the oil is. Is that right? What does WTI mean? Thanks again

6

A 33% split is a little bit vague, but say a well makes 200 Bopd and 200 Mcfd (wet gas - high BTU). The 200 Mcfd (wet gas) goes to a gas plant where the liquids are stripped out. After this process is complete, you no longer have 200 Mcfd gas, you have maybe 120 Mcfd gas (now dry gas - low BTU). The remaining 80 Mcfd gas was the heavier end hydrocarbons (propane, butanes, pentanes, etc.) that were stripped out and then sold as a liquid (NGLs) - say 5 to 10 bbls - which is much more valuable than the "lost" gas. These are just hypothetical numbers. The volume of NGLs recovered depends primarily on the molecular composition of the gas. The more heavy ends in the gas, the more NGLs that can be recovered.

And yes, this is a wonderful time for NGLs. There is a lot of money to be made for gas plants (and gas-to-liquids plants where methane/ethane molecules are combined to create heavy ends that that can be sold as a liquid).

WTI - West Texas Intermediate (an oil benchmark - Brent Crude would be another benchmark for the European markets)

7

Thanks so much for the information. I'm just trying to figure out something that probably not figurable lol. I'm waiting on the D.O. from EOG on my wells in Montague County Texas. It's been 6 months and nothing yet.

8

I may have missed it in another thread but does anyone have any insight or history as to why NGLs are not reported on the Texas RRC website?