On a recent check stub I was paid for 3,832 MCF of NG. According to the NDIC production numbers 4,838 MCF's were sold. This leaves a difference of 1,006 MCF's. My check stub also indicates that 37,349 ? of NGL were sold. First what are the NGL units called? Maybe gallons? Is there some sort of conversion factor to figure the relationship between the 37,349 and the 1,006 MCF? I have other wells on which I recently begin receiving royalties and I do understand how the oil is calculated but am having trouble understanding the NGL. I have called the well operator but they were not able to answer my questions or this matter so I am hoping someone here can put me on the right track.
Thanks,
Terry
Mr. Peterson,
You are venturing into the complex world of NGLs. I'll give a short description of what happens.
You have more gas at the wellhead because hydrocarbons are produced at higher pressures and temperatures in the formation and at the wellhead. As the pressure and temp falls, you will have condensates and then NGLs fall out of the gas stream. Ethane, Propane, and Butane are gases at standard temperature and pressure, but will condense in cryogenic processing plants that are common today. The liquids are of greater value than pure methane or natural gas.
The natural gas leaves the wellhead and travels to the processing plant where it is essentially cooled or refrigerated to get the higher value liquids to fall out. The gas shrinks and some energy is spent/lost along the way, but you gain higher value NGLs.
That's how you end up with a number like 4,000 mcf at the wellhead, but end up getting paid for 3,000 mcf and 5,000 gallons of NGLs.
I hope this helps. In ND, it's nice to get some value for the gas. It has been and still is flared in places where there is no gas gathering system.
R.T.
Dear Mr. Peterson
You well produces MCF of gas.
Gas is paid per MMBTU.
in a perfect little world, 1MCF of Gas = !MMBTU, at standard temperature and pressure.
If the gas is "rich" condensate is removed at the separator and sold in BBL, water is removed in the dehydration unit. Then a decision needs to be to build a gas processing plant (generally make good economic sense with rich gas and gas from more than one well to process). The decision is all about money. Would the increase in price stripping out the NGL's pay for the Gas Processing Plant.
In west Texas, they are delirious if their gas gets 5 gal per mcf. In upper gulf coast Texas we routinely extract 15-20 gal per mcf.
One more item to look at is the lease use gas. Then you can determine shrinkage from NGL and water.
Hope I did not go over the top with an answer.