Note 4 - Gas Purchase Agreements

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Oil and Gas Delivery Commitments and Contracts [Text Block]

Note 4. Gas Purchase Agreements

The Company has multiple contracts with Dominion Field Services and Interstate Gas Supply (collectively, the “Gas Purchasers”) which obligate the Gas Purchasers to purchase, and the Company to sell and deliver, certain quantities of natural gas production from the Company’s oil and gas properties throughout the contract periods. The Company

may

elect to lock-in specific volumes of natural gas to be sold in specific months at a mutually agreeable price. The Company has elected to lock-in various monthly quantities of natural gas which total

540,000

MCF from

April

2017

through

March

2018

at various monthly weighted-average pricing provisions averaging

$2.84

per MCF, net of regional basis adjustments.

Pricing provisions with the Gas Purchasers apply to certain fixed quantities on a monthly basis with excess monthly quantities being priced based on the current spot market price, plus or minus a current regional basis adjustment. The impact of these contracts on the Company’s future oil and gas sales cannot fully be measured until actual production volumes and prices have been determined.