I am very new to this website and have greatly enjoyed reading and learning so much from the various discussions. I have a simple question for someone. On some of my wells I am paid for the NGL in addition to the gas and oil. I cannot figure out what the NGL represents. Some wells do not show this. Your help would be appreciated.
NGL = Natural Gas Liquids. They are what you get when you process natural gas. These liquids are measured and priced in gallons. The operator will pay for these based on their gas contracts.
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NGL stands for natural gas liquids. Natural gas that is produced from gas wells is primarily methane and referred to as “dry” gas. Natural gas produced from wells that also produce oil or condensate is considered “wet” gas because it includes heavier components heavier than methane that can be separated and sold as liquids. Those NGLs include ethane, propane, butane, and natural gasoline, each of which are useful in different petrochemical applications.
If gas is low in liquids content, processing to recover the liquids may not be economical, and gas processing facilities aren’t available in all areas. In those cases, the gas production is sold on a “full wellstream” basis, including the NGL content. Depending on the contract terms, the gas is sold under, the price paid per MCF may include a BTU adjustment giving credit for the higher heating value of natural gas that includes those heavier liquid components.
Whether your royalty statement includes a separate entry for NGLs could also depend on the provisions in your lease agreement.
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Some operators report gas and NGL sales separately on checks and some combine the gas and NGL sales and report all as gas. Either way you are paid the royalties.
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That’s what I said TD.
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