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Title: Negotiation Of The Gas Contract
Author: Donald T. Brown
Source: 1987 Gulf Coast Measurement Short Course (Now called ASGMT)
Year Published: 1987
Abstract: The Contract Negotiator or Gas Buyer is quite often questioned about the steps involved in negotiating the gas contract. It almost always begins with a telephone call. If initiated by the Seller, its because he has seen Buyers pipeline in the vicinity of his well or because he has seen it indicated on a map. If initiated by the Gas Buyer, its because he has read about Sellers well in some publication or because the pipelines field personnel have seen the drilling rig and passed the information along to the Gas Buyer. The initial contact is for one of two reasons - Seller currently has gas available for sale or has a drilling program that will begin in the near future. The Seller is interested in the kind of contracts Buyer is currently making and Buyer is interested in the quantity of gas Seller has or may have available for sale. The Seller will request that Buyer furnish to Selley a map that shows the location of Buyers pipeline in relation to Sellers well and may request that Seller be furnished a copy of Buyers current basic or form contract. Buyer will request that Seller furnish to Buyer any available well data, which would include well logs, deliverability tests, gas analysis tests, well plats, etc., or In the absence of test data, the prospective purchaser would like an opportunity to review all available geological data. This data is then used to obtain the estimated reserves of gas involved and the estimated cost for any facilities that may be required to enable Buyer to receive Sellers gas. Management approval can then be obtained to make a contract offer.

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