Hello All! I’m new to this whole process and I’m not 100% sure what I’m doing. I have modeled my bookkeeping on what my Dad did. All the other statements I receive are very basic and I understand them however I’m having a hard wrapping my head around the XTO statements. The majority of the other statements I receive break down production into 4 types(oil, gas ,condensate & plant products) which I keep up with that way. XTO has over a dozen production types of which I understand oil, gas & condensate. Where I’m at a loss is how to categorize 4OU, drip condensate, downstream fuel, flare & sulphur.
Hi! Welcome to the forum!
The variation between statements is quite frustrating, indeed! At least this means you have more information rather than less, and you’re being paid on these other items, which is a good start.
First, if you haven’t seen it, XTO has a basic “how to read your statement” form on their website here. https://www.xtoenergy.com/-/media/XTO/Files/How-to-Read-Check-Detail-2019.pdf Sounds like you can read it fine you just don’t know what to do with some of the numbers, but just making sure you’ve seen it.
Fundamentally, there’s gaseous hydrocarbon (gas), liquid hydrocarbon (oil), and non-hydrocarbons (sulfur, helium, CO2, etc). Everything else is a form of slicing and dicing where and how that gas and oil is valued.
- Condensate is liquid hydrocarbon that comes out of the gas after if leaves the wellhead but before it goes into the marketing pipeline to the gas plant. If a well is labeled a “gas well” then any liquid it sells at the tanks will be considered “condensate” (for simplicity). But if that well was labeled and “oil well” that exact same product sold the exact same way would be called oil.
- Residue is gas that is sold and processed at a gas plant, and is the leftover gas after taking out the valuable “plant products” like pentane, propane, and butane (NGLs)
- Plant products (also called NGLs) are liquids that are pulled out of the gas at the plant.
- Drip condensate is liquid that comes out of the gas after the gas enters the marketing pipeline but before it’s processed at the plant.
- Flare is gas that never makes it to the gas pipeline and was burned on site to dispose
- Downstream fuel is gas that made it into a pipeline but was used along the way to the gas plant to run meters and compressors and whatnot.
The basic answer is it depends on how detailed you want your books to be. Most of these are forms of hydrocarbon produced from the wellbore so they owe you for them, but don’t make it to market or roundaboutly make it to market for some reason. Drip condensate is basically oil (, and downstream fuel and flare and basically gas. Could you mean L&U for “4OU”? That would also basically be gas they can’t account for, usually from leaks or meter calibration inconsistencies.
Option A would be to look at your collection of wells, see what has substantial value, track those separately, and group everything else under “other”. Commonly these are oil/condensate, gas/residue, and NGLs. If your wells produce significant revenue from sulfur or helium, you could track those separate too. Are any of these other categories substantial for your wells?
Option B is to track everything separately and know that only your XTO well will have all these extra categories. Making sure you know how and why you’re paid on them is more important in the long run than the decimals If tracking all the things makes you go a bit crazy and not track them, just group them into “other” (I can say that since I’m not an accountant, but the idea probably makes accountants cringe). If XTO sells the asset to another operator, you’ll just need a way to make sure the new operator doesn’t screw up and miss paying you on those things.