I do my best to understand and audit a statement. Most of the statements we receive are what I would call all over the place on corrections. See the screenshot and tell me what you see please. I see very large gathering fees, negative values on 0 volume. I have created a spreadsheet to follow production volume monthly. Not even sure how to enter most of this statement to track and compare production.
The lines that have the “royalty interest” with a date and a product amount and a product price are the ones to track for production. The tax and fee lines are a net against the gross amounts. You will sometimes get correction lines for previous months. They “Should” have a previous month that equals them. They take off the incorrect number ad replace it with a new “correct” amount. Looks like this statement has some plant products correction months.
Some companies are better than others as far as readability.
Thank you for your response M Barnes. Why is there months with no production and negative value? could this be fees? I guess at some point I will need to ask for a itemized statements in order to know what some of the numbers actually mean.
Why is the gathering fee so high on gas?
Here is a screen shot for my attempt to track production. This is work in progress. So far this lease number isn’t too bad. Some are way off on production numbers.
Each operator sets their own fees for marketing, gathering, transportation, compressing, dewatering, etc. It takes a lot of work to get gas processed enough to sell.
The check detail reports 100% Gas and NGL products for January 2023 and 100% Oil for February 2023. The 2022 months are reductions of the original reported revenue. These are adjusting entries for months reported on earlier checks. If you look at the prior month check, you will have been paid for December 2022 Gas and NGL. On this check, the NGL gross revenues for December 2022 are being reduced. To determine what you received for NGL, you need to net the revenues reported on both checks. For example, if the prior month reported December 2022 NGL sales of $100,000 and this check reports the -$2552.66, then the gross NGL sales for December 2022 was $97,447.34
Why are Gathering fees about 3/4 of the value of the Gas?
Depends upon the operator as to what they are calling “gathering”. It does cost them money to get the gas out of the wellhead and into the the gathering line. They need to make sure it doesn’t have any water in it, is a certain pressure and several other items. Some put the de-watering fees and compression and hide it in the gathering line. The percentage is higher when gas in $2.00 than when gas is $6.00. You really need to look at the actual statement from the operator to see how it is broken out.
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