Who can sell this gas, who is owed on it, and who signs for the pad.
methane.land is our gas-rights screen, for gas that is flared, shut in, surplus or sold on terms you want to beat. Send the rate, the county and who owns the surface, and a landman answers four questions from the lease and the county records: who can sell the gas, who is owed royalty on it, which flaring rules bear on it, and whose signatures a power or compute pad needs. The power math below runs on your own numbers.
For operators and working interest owners, surface owners, mineral and royalty owners, and the power and compute companies looking for gas.
Looking for a buyer, a gas supply or a site, not a rights screen? Introductions are made at methane.exchange, the origination desk of the same landmen.
Three facts start a screen
- The gas. Rate in MCFD and where it goes now: flared, vented, shut in or part sold.
- The location. County and state, and the lease or well name.
- The ground. Who owns the surface where equipment would sit.
A gas analysis and a copy of the lease help if you have them. They aren't needed to start.
Equipment list. Each tag is a section below.
What the gas is
Every screen starts with the stream coming off the wellhead. A rate alone doesn't size a project. These do.
| Property | Send | Why it matters |
|---|---|---|
| Rate | MCFD now, and how fast it's falling | Flush production drops fast. Genset size is often set off the rate six to twelve months out, not the IP. |
| Pressure | psig at the separator | Low-pressure gas may need a compressor ahead of the engine. |
| Heating value | BTU/scf from a gas analysis | Rich casinghead gas carries heavy ends that knock engines. Lean gas makes less power per MCF. |
| H2S | ppm, if any | Sour gas gets treated before the engine and changes the safety plan on the pad. |
| CO2 and nitrogen | mole percent from the analysis | Inerts lower the heating value and derate the engine. |
| Where it goes now | Flared, vented, shut in or part sold | Sets which rules apply and which lease clauses come into play. |
| Pipeline outlook | When, if ever, a gathering line gets there | A tie-in a few months out and a tie-in years out lead to different site paper. |
Making it engine fuel
The separator splits oil, water and gas. What comes off the top is rarely engine-ready. Rich gas usually runs through a JT skid or a refrigeration unit to drop out the heavy ends, and sour gas goes through a scavenger.
That's equipment work for the genset vendor and your engineer. The screen flags where it's likely so nobody prices a project on raw wellhead BTU.
The meter is where royalty gets figured
Gas sold to a genset is still gas sold. The custody meter is the sale point, and the gas-rights questions all hang on it.
- Who can sell the gas?
- The working interest owners, usually through the operator under the JOA. A non-op owner may take in kind. The power or compute company needs a gas purchase agreement with whoever holds the right to sell.
- Is gas burned for power free of royalty?
- Most leases let the operator use gas royalty-free for operations on the lease, and gas running your own ESPs and compressors may fit. Gas running somebody else's compute load is usually treated as a sale, and the royalty owners will expect to be paid on it. Read the free-use clause before anyone promises otherwise.
- Does the pay deck change?
- A new purchaser and a new sale point usually mean new division orders or a revised deck. The decimals stay the same; who pays them, and on what volume, changes.
- Is the lease held by shut-in royalty?
- If the well has been shut in for want of a market and shut-in payments are holding the lease, starting a sale changes that. Read the shut-in clause, and the unit, before the first MCF moves.
- Fee, state or federal minerals?
- BLM, the Texas GLO and the New Mexico State Land Office each have their own rules on gas used on the lease, sold or flared. On fee land it comes down to the lease form.
The rules pushing gas off the flare
Flaring rules are one reason these projects get a look. This is the short version as of September 2026, for orientation only. Rules and dates move, so check the current text before anyone files anything.
| Where | Rule | What it does | For a project |
|---|---|---|---|
| Texas | RRC Statewide Rule 32, 16 TAC § 3.32 | Limits flaring and venting without an exception. A staff-approved exception is capped at 180 days, except for volumes of 50 mcf a day or less for each gas well, oil lease or commingled vent or flare point. | A renewal rests on a showing that “the conditions for which the initial exception or latest renewal was granted have not significantly changed despite a good-faith attempt by the operator” to direct the gas to or use it for purposes and uses authorized by law. The rule does not say how running an engine on part of the gas changes an exception. Read the rule, subsection by subsection. |
| New Mexico | OCD, 19.15.27 NMAC | Operators must reach a gas capture rate of 98% by the end of 2026. | Gas put to use counts toward the capture rate. Ask how your operator reports it. |
| Federal, oil wells | EPA NSPS OOOOb, new and modified sources; emission guidelines OOOOc, existing sources (40 CFR part 60) | Phases out routine flaring of associated gas at new oil wells: sales line first, then on-site fuel, another useful purpose or reinjection. Existing wells are reached through state plans, which are still being written. | On-site power is one of the named ways off the flare at a new well. EPA has moved and revised several dates since 2025, so confirm what applies to your well. |
| Federal and Indian leases | BLM, 43 CFR subparts 3178 and 3179 | Royalty-free use of lease gas, waste prevention, and when flared or vented gas owes royalty. | Flaring can owe royalty with no sale behind it. A 2024 federal court order stops BLM from enforcing the 2024 rule in Texas and four other states, so check where it stands. |
| Federal methane fee | Clean Air Act § 136 | Congress moved the charge to emissions from 2034 on. | Not a reason to move this year, whatever a vendor deck says. |
Texas guides, read from the rule, the statutes, and the lease
- GuideTexas Rule 32: what may be flared or vented, and when an operator needs an exceptionThe Railroad Commission rule read by subsection, with what Form R-32 and the monthly production report add.
- GuideTexas casinghead gas and gas well gas: what the waste and gas-use statutes sayNatural Resources Code chapters 85 and 86: what counts as waste and what each kind of gas may be used for.
- GuideSurface owner vs. mineral owner wellsite pad rights for gas-to-power and compute skidsHow the dominant mineral estate, existing surface use agreements, and third-party surface leases apply at the well pad.
- GuideShut-in royalty and stranded gas well leases in Texas: what changes when a generator takes gasCumulative shut-in time limits, production in paying quantities, and cessation-of-production clocks on secondary-term leases.
- GuideFree-use gas clauses and wellsite generator fuel royalty in TexasHow lease free-use clauses and gas royalty clauses distinguish lease ESP power from commercial compute loads and JT skid liquids.
Each guide cites the governing statute, commission rule, or lease provision.
How much power the gas makes
A data sheet for the genset. Change any line; the stream numbers match the drawing up top. It's straight energy balance from your inputs, a screening estimate and nothing more: not an offer, an appraisal or an engineering study.
Data sheet G-400: power screen
WH-100 wellhead
From the gas analysis. Pipeline gas runs near 1,000; rich casinghead gas runs higher.
Your own number. It drives the 12-month rate and the spreadsheet schedule.
V-200 / X-250 conditioning
Zero if the gas goes to the engine as is. A JT skid on rich gas takes some energy out as NGL; the skid vendor can give you the number.
G-400 genset
Off the genset spec sheet, on the same basis as the heating value (HHV or LHV). Smaller units burn more fuel per kWh.
Raw field gas means downtime. When the engine is down, the gas goes to the flare.
FQ-300 money at the meter
What a kWh is worth to whoever uses it: diesel it replaces, a host's price, a utility rate.
The lease royalty, such as 0.125, 0.1875 or 0.25.
Enter your own gas rate to run the screen. Heating value, decline, liquids, heat rate, runtime and royalty start at common screening assumptions; replace them with your analysis, spec sheet and lease. Nothing here is a measured or available volume.
Stream 4: power the gas can carry
Enter a rate kW continuous
Gross output from the gas. Engine parasitic load and altitude or heat derate take some off.
| Wellhead gas | Enter a rate |
|---|---|
| Fuel to the engine | Enter a rate |
| Still to flare in downtime, today's rate | Enter a rate |
| Energy at runtime, at today's rate | Enter a rate |
| Kept off the flare, at today's rate | Enter a rate |
| In 12 months at the decline | Enter a rate |
| Each 100 MCFD of this gas | Enter a rate |
Yearly Mcf, MWh and dollar lines hold today's rate for a full year, with no decline. The 12-month line and the .csv schedule apply the decline.
Gas sale, operator and WI owners
Add a price
Royalty on it: Add a price, before any deductions the lease allows.
Power value, whoever uses it
Add a price
Fuel cost at your gas price: Add a price.
Same gas, two sides of one sale. Don't add them together.
Find a buyer or a site at methane.exchange
This is gross output from your numbers, not an engineering study. For introductions between gas suppliers, buyers, site owners and equipment providers, go to methane.exchange.
Where the power goes, and who signs for the site
The load decides the deal. Power for the lease's own ESPs and compressors stays inside the oil and gas lease. Power for a compute container or the grid brings in a third party, and a third party needs its own right to be on the ground.
- Lease load
- Replaces diesel gensets or utility power on the lease. Usually the operator's equipment on the operator's pad.
- Compute
- Containers set next to the gas by a hosting company that buys the gas or the power. Needs a site lease and a gas or power contract.
- Grid
- Only where a line and an interconnect are already close. Utility and grid-operator rules decide the rest.
Surface questions we run down
- Does the mineral lease cover it? The lessee's right to use the surface reaches what's reasonably necessary to produce the lease. In Texas, a third party's compute site is a harder fit, so a surface lease from the surface owner is the usual route.
- What does the SUA say? Pad size, equipment, noise, lights and assignment limits in the existing surface use agreement often decide whether a new skid fits.
- Where, exactly? Pad location and size, the road in, and the line from the separator to the skid. Any line that leaves the lease needs its own ROW.
- Noise and lights. Gensets run around the clock. Distance to the house and the pens matters to the owner and belongs in the lease.
- Term and removal. Owners often tie the term to the gas and set a removal deadline, a restoration standard and a bond.
- Accommodation doctrine. In Texas it governs how the mineral side uses the surface (Getty Oil Co. v. Jones; Merriman v. XTO Energy). It can protect an existing surface use. It doesn't give anybody a right to put a third party's plant on the ranch.
Who gets paid for what
| Operator and WI owners | The gas sale at the meter |
|---|---|
| Royalty owners | Royalty on gas sold, per the lease |
| Surface owner | Rent for the pad, the road and any line |
| Power or compute company | The power, less what it pays for gas and site |
Four parties, four sets of paper. The screen lists the agreements that usually come up and who usually signs.
Send the gas facts
One of our landmen reads what you send and replies by email or phone. Tell us which side you're on so we know how to answer.
What the screen covers
- A power estimate from your numbers, with the assumptions written down.
- The Texas, New Mexico and federal flaring and royalty rules that bear on it, cited to the section.
- Who owns the surface and minerals at the site, read from the county records.
- A list of the agreements that usually come up and who usually signs each: gas purchase, surface lease, ROW, division orders.
We're landmen, not engineers. Where a question needs an engineer, the screen says so. The first reply is a few questions; a full screen is scoped with you in writing before the record work starts.
Call (307) 263-8515 or email hello@methane.land.
Legend and abbreviations
Terms on the drawing and in the paperwork.
- MCFDThousand cubic feet a day
- The gas rate everything else scales from.
- MMBtuMillion BTU
- The energy unit gas is priced in. MCFD times BTU/scf, divided by 1,000, is MMBtu a day.
- BTU/scfHeating value
- Energy in a standard cubic foot of gas. Sets how much power each MCF makes and whether the gas needs conditioning.
- HRHeat rate
- BTU of fuel a genset burns for each kWh it makes. Lower is better. It's on the spec sheet.
- Casinghead gas
- Gas produced with oil from an oil well, as opposed to gas-well gas.
- Stranded gas
- Gas with no pipeline to take it, or not enough capacity when one gets there. On a drawing, a line that ends in a blind.
- Flare mitigation
- Moving gas off the flare to a use: sales, lease fuel, power or reinjection.
- Flare to compute
- Compute containers at the wellsite running on gas the pipeline can't take.
- JTJT skid
- Joule-Thomson unit: drops the gas pressure to chill it and knock out heavy ends before the engine.
- FQCustody meter
- The meter where gas changes hands; FQ is its instrument code. Price and royalty are figured on its volume.
- Free-use clause
- Lease language that lets the operator burn gas for lease operations without paying royalty on it.
- Shut-in royalty
- A payment that keeps a lease alive while a well capable of producing is shut in for want of a market.
- DODivision order
- The statement of each owner's decimal interest that the purchaser or operator pays on.
- SUASurface use agreement
- The contract between the operator and the surface owner for pads, roads, lines and damages.
- SWR 32Statewide Rule 32
- The Texas Railroad Commission rule on flaring and venting, 16 TAC § 3.32. See the Rule 32 guide.
- OOOOb/cEPA methane standards
- Federal oil and gas methane rules for new sources (OOOOb) and existing sources (OOOOc), including limits on routine flaring.
- WIWorking interest
- The share of a well's costs an owner carries and the share of the production it keeps, before royalty.
- JOAJoint operating agreement
- The contract that lets the working interest owners share operations and costs under one operator.
- NGLNatural gas liquids
- The heavy ends that drop out of rich gas at a JT skid or refrigeration unit and sell as product.
- ESPElectric submersible pump
- An artificial-lift pump run on electric power at the well, one of the lease loads a genset can carry.
- IPInitial production
- A well's rate in its first days or months, usually its highest.
- RRCRailroad Commission
- The Texas agency that regulates oil and gas, including flaring under Statewide Rule 32.
- OCDOil Conservation Division
- The New Mexico agency that regulates oil and gas, including flaring and gas capture under 19.15.27 NMAC.
- GLOGeneral Land Office
- The Texas agency that manages state-owned minerals and surface. New Mexico's counterpart is the State Land Office.
- PFDProcess flow diagram
- A schematic of how a stream moves through equipment. The drawing at the top of this page is a simplified one.