Wednesday, April 6, 2011

Oil Patch Royalty Checks and Revenue Streams

Someone asked me if the checks they receive from operators in the Bakken include sales of natural gas.

It has been my experience, that if one person asks, others have have the same question. Here's the answer:
Yes, there should be three revenue streams on royalty checks from the oil patch. (Obviously, sometimes those revenue streams go to "zero.")

"O" for oil. "G" for natural gas. "P" for plant products.  As the gas is processed and purified for transportation, by products like natural gas condensate, sulfur, ethane, and natural gas liquids like butane, propane, isobutane, and pentanes are produced and sold. Source.
This answer, and answers to many other frequently asked questions can be found at the tab at the top of the blog, FAQS.
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2 comments:

  1. AnonymousApril 6, 2011 at 1:53 PM

    Ok, so a couple of questions related to that then. \

    1.) When they "Flare" the gass, that basically means that nobody gets any revenue from that (as it's literally up in smoke), is this correct?

    2.) What kind of "plant" product other than oil/coal (and that's stretching it) can you produce from a well?

    ReplyDelete
  2. Bruce OksolApril 6, 2011 at 5:06 PM

    See note comment above.

    ReplyDelete

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