Pricing of Oil
- The Operators (Pioneer/Westar) sell all of its oil directly to CountryMark
- CountryMark’s purchase price is the daily average price for the month in which oil was collected
- CountryMark pays NYMEX spot market price less a local market adjustment of $8 per barrel
- This market adjustment is primarily the transportation cost of getting the oil from the producing lease to CountryMark’s refinery located in Mt. Vernon, IN.
- Adjustments in the industry can exceed $15 or more
- The Operators (Pioneer/Westar) have bonus adjustments added back to the base CountryMark price, based on total production of the Operator
- Averaging $3.00 to $4.00 per barrel bonus (equates to NYMEX – $3 or $4)
- This market adjustment is primarily the transportation cost of getting the oil from the producing lease to CountryMark’s refinery located in Mt. Vernon, IN.
- CountryMark collects the oil at each well one or more times per month depending on volume
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