What Is A Gas Balancing Agreement

As pipelines become more common, oil balancing can become an issue. However, this article focuses on wellhead gas imbalances. Gas imbalances occur when a homeowner does not receive his or her proportionate share of gas production in proportion to his or her share of gas production relative to his or her interests. An overproduced owner is an owner of interests who has sold more than his or her proportionate share of gas production; that an under-produced part has sold less than its proportional share of production. For example, suppose that the owners of union interests, A and B, each own a 50% stake in a producing property. Owner A does not have a gas contract and B sells all the gas produced by the property. Owner A is a by-product and Owner B is a property. Owner A is by-product and Owner B is over-produced. Currently, gas imbalances between workers` owners are common in the oil and gas industry.

Obvious gas balancing situations that require an engineer`s attention include planning the gas flow between shared connections and/or multiple buyers, gas production nominations and allocations between buyers, and when balancing imbalances. Not-so-obvious situations that need to be evaluated by engineers include ownership of overproduction/underproduction at the time of acquisition, suspension of the sale of an overproduced portion once it has produced its share of reserves, allocation of factory fluids unless all parties sell gas, gas-based price paid for cash settlement, and the responsibilities of operators and non-operators. In this article, the engineer will become familiar with a working knowledge of the current situation of gas balancing by identifying some of the unbalanced problems and proposing practical solutions. In addition, there are federal regulations, the practical solution. In addition, federal regulations that have contributed to the creation of the current gas marketing environment and contributed to the imbalance will be briefly reviewed. Finally, current accounting issues are discussed and a draft standard gas clearing contract (BBA) is presented in Annex A. The compensation of the proportional shares of the operator and the non-operator in the natural gas produced from the boreholes, as well as the predominant royalty for non-operators taken in kind, shall be subject to and forming an integral part of the terms and conditions of the gas compensation agreement annexed thereto. It is important that the operator`s back office is aware of the gas balancing agreements (GBAs) found in the JOA of each well.

These GBAs provide operator policies for the necessary monitoring and reporting of imbalances to Wi-Fi partners, whether monthly, quarterly or annual. This agreement also contains conditions in the event of an imbalance settlement or disbursement. The sale of gas in the current natural gas marketing environment can cause owners of union interests to become unbalanced with the responsibility for their share of gas in a producing reservoir. .