Royalty questions

When working with the generic calculators that are out there (such as geology.com), do I use the acres I own, the percentage on my lease, and how much Mmcfe was produced for my Section (monthly, quarterly, daily)? Would the Acres in Production Unit be the acres in my Section (640 acres)? Is that right? Also, do royalties generally get paid monthly or quarterly? I tried to find that in my lease and didn't see it anywhere. I see the percentage, but not when they pay. I know the landowner is responsible for taxes, but do they take anything out initially, too, for anything else?

Tags: calculator, payments, royalties

Views: 29

Replies to This Discussion

Permalink Reply by Les Bamburg on August 19, 2010 at 7:35
Joey, yes you would use your acres in the section, the total acres in the section/unit (~ 640), your royalty % and production in the month.

Example - (32 acres / 640 acres) * 20% Royalty = 1% of production or gas sales

Payments would normally monthly but most lessee reserve the right to pay less frequently if the check amount is small.

Yes - there can be other deductions and you should check the board for discussions regarding that topic. Also suggest you check the following website.

http://www.americanroyaltycouncil.com/

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