Certain Relationships and Related Party Transactions

3 Months Ended

Mar. 31, 2018

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Partnership has entered into the following significant transactions with the MGP and its affiliates as provided under its Partnership Agreement. Administrative costs, which are included in general and administrative expenses in the Partnership’s condensed statements of operations, are payable at $75 per well per month. Monthly well supervision fees, which are included in production expense in the Partnership’s condensed statements of operations, are payable at $975 per well per month for Marcellus wells for operating and maintaining the wells. Well supervision fees are proportionately reduced to the extent the Partnership does not acquire 100% of the working interest in a well. Transportation fees are included in production expenses in the Partnership’s condensed statements of operations and are generally payable at 16% of the natural gas sales price or $0.35 per Mcf, whichever is greater. Direct costs, which are included in production and general administrative expenses in the Partnership’s statements of operations, are payable to the MGP and its affiliates as reimbursement for all costs expended on the Partnership’s behalf.

The following table provides information with respect to these costs and the periods incurred.



	Three Months Ended March 31,				Change
	2018		2017*		$			%
Administrative fees	$	2,700	$	2,700	$	—		—	%
Supervision fees	35,100		35,100		—			—	%
Transportation fees	161,000		191,100		(30,100		)	(16	)%
Direct costs	102,000		73,200		28,800			39	%
Total	$	300,800	$	302,100	$	(1,300	)	—	%

* Amounts paid to the Previous MGP.

The MGP and its affiliates perform all administrative and management functions for the Partnership, including billing revenues and paying expenses. Accounts receivable trade-affiliate on the Partnership’s condensed balance sheets includes the net production revenues due from the MGP.

DGOC Series 28, L.P. 10-Q