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Permalink Reply by herefordsnshale on July 22, 2008 at 10:38

That's an interesting formula, it hard to say just how accurate it might be because production varies so much on different wells in different areas.

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Permalink Reply by DrWAVeSport Cd1 on July 22, 2008 at 10:49

Are you sure???? Something seems very wrong with these figures. In the mail today, I was just offered $10K+ for percentage of royalties/per year on one acre. And, that is way tooo loooow. Then where does JP Morgan get the $40K+ figure from?????

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Permalink Reply by Two Dogs, Pirate on July 22, 2008 at 11:04

Ammount of product produced times price of product divided by unit size (acres per unit) divided by royalty equals price per acre going to landowner per day. Lets say the well produces 100 barrells of oil a day and the price is $100 per barrell and the unit is 80 acres and you have 1/5 royalty. 100 times $100 equals $10,000 divided by 80 equals $125 divided by 5 equals $25 per acre a day going to the landowner.

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Permalink Reply by DrWAVeSport Cd1 on July 22, 2008 at 11:08

TRS, how about ng?

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Permalink Reply by Two Dogs, Pirate on July 22, 2008 at 11:14

Natural gas is measured in thousands there is a 1000 1000 in a million. So the well does 1 million a day and lets say the unit is 320 acres and the price of gas is $10 per thousand. 1000 times $10 equals 10,000 divided by 320 equals $31.25 divided by 5 equals $6.25 per acre per day to the landowner.

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Permalink Reply by DrWAVeSport Cd1 on July 22, 2008 at 11:17

Thanks!

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