Your Oil and Gas Royalty Check: What Are All Those Product Codes?
Mineral owners with producing properties are familiar with receiving oil royalties or natural gas royalties. But what about all of those other product codes on your royalty check? Most commonly, royalty owners refer to themselves as having oil and gas rights or owning oil and gas royalties, but oil and gas are general terms that can cover a number of different products.
Do you recognize any of the terms below? These are all products that were listed on recent royalty checks we reviewed. All fall under the oil and gas umbrella, but each can be uniquely defined and may have a separate product code on the royalty check.
Condensate – mostly composed of heavier hydrocarbons (butane, propane, pentane) that fall out of the gas stream when vapors cool or pressure is reduced
Skim Condensate – hydrocarbons recovered by skimming water produced from a well
Drip Condensate – another name for the heavier liquid hydrocarbons that drop out as they condense
Natural Gas Liquids (NGL) – the components of natural gas that are taken in liquid form
Residue – the components of the natural gas stream which remain after the extraction of the heavier liquids, liquefiable hydrocarbons, impurities, etc.
Next time you look at your royalty statement, see if you can identify any product codes you did not recognize before. Also, check out the price at which each product was sold. This is usually the next column over on the royalty check and helps us understand that not everything that is produced out of the ground is sold at $90 a barrel.
If you have questions about your oil and gas royalties, call us toll free at 1-800-950-6954 or email us at info@LegacyRoyalties.com. You can also visit our Helpful Terminology & Definitions page for more great information about your mineral rights.