Tuesday, September 15, 2009

Great article from Peter Gorman about the great "Mailbox Money"

How much money did you really sign away your quality of life, health, and the value of your property for?
Peter Gorman's article does the math.

One more thing to think about....how honest is the gas company about royalties? As posted before some gas and oil companies can't be trusted.

Guess we won't have too many Jed Clampitt's in the near future!!


Barnett Shale Mailbox Money
by Peter Gorman
Well, from this corner, here’s the skinny on the mailbox money from the Barnett Shale.I’ve got about 60,000 square feet, just under an acre-and-a-half. There’s a well across the street that’s producing pretty decently. The pool for the well is about 200 acres, so I get nearly three-quarters of 1 percent of the royalty money.With the price of gas where it is, my royalty share will be about $40 this month.
For people with houses in town, where the square footage of their property is probably more like 6,000 feet than 60,000, their take on my well would be $4 this month. And if you happen to be in a pool where multiple wells are drilled, let’s say 4, your take would go up to about $16 this month.
And that will go to $32 if the price of gas doubles.
Now most, if not all, gas companies only send out royalty checks when they reach $100. So if you are in a single well pool that’s producing like mine, you’ll be waiting 25 months, just over two years, for a check.Unless the price of gas goes up by say, 500 percent, in which case you’ll get a $100 check every five months.
Not what anyone had in mind when the keys to the city were given to the gas companies, I’ll bet.
But that’s how the figures break down.

No comments: