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Re: instructmba post# 9177

Tuesday, 05/20/2008 11:58:19 PM

Tuesday, May 20, 2008 11:58:19 PM

Post# of 27567
Whoa you almost had me there took me a minute to figure out why the numbers didn't wash. You are using commercial spot prices as you cost basis for the gas. If the trust was it's own producer, transporter and provider to the commercial spot market $11 dollars just might be true. But the trust does none of those, it has to sell the gas at the wellhead price and be done with it. so try multiplying by about $8.99 if you want to be on the optimistic side. This will give you a nice gross number under ideal transport and sales conditions. For more on how gas sales work and recent price you should consult http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp

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