Residue gas on statement

Royalty Statements
1

I own an interest in the Dallas 213 Unit 1H in Ward County operated by Permian Resources. I saw and read the thread “Hidden costs by Permian Resources”. My question pertains to how these costs are calculated, specifically on Residue Gas. Jan – May stmts there were compression deductions and June – Sept stmts there were purchaser gathering adjustments. In the chart below these deductions seem excessive ranging from 34.92% - 244.44% of my income. What accounts for this wide range of deduction cost to income? The largest percentage deduction was on my June stmt with me having negative income. I had to pay for the sale of this residue gas. Who makes money on this type of transaction if I’m losing money on it?

Residue Gas

Royalty Inc Compression Purch gathering adj % of royalty
Jan 225 -78.56 0 34.92%
Feb 247.03 -80.37 0 32.53%
Mar 224.14 -81.96 0 36.57%
April 117.49 -72.67 0 61.85%
May 87.11 -79.95 0 91.78%
June 31.14 0 -76.12 244.44%
July 70.23 0 -78.71 112.07%
Aug 104.58 0 -74.99 71.71%
Sept 138.78 0 -77.18 55.61%
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Permian reports the processed gas as its two components - (1) residue gas (volumes remaining and sold after removal of liquids) and (2) plant products (liquids removed from gas). Permian deducts the costs out of the gas, but these costs really apply to the combined value of the gas. To get the full picture, you have to add the Gas and Liquids sales together and then deduct the gathering costs and severance taxes. That should give you a net positive number for gas sales.

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3

Thank you. I appreciate the explanation.

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