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Posted by Char on May 29, 2025 at 14:42 — 4 Comments
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Oil & Gas ProSkip Peel - Mineral Consultant said…
Flip, the State Of Mississippi holds a deposit from Mainland that will defray or cover the cost to plug and abandon the well. If Mainland doesn't take care of abandonment, they may find it difficult to get well permits in the future. And not just in Mississippi.
Oil & Gas ProDion Warr, CPL said…
Flip:
Let's look at your message left at my blog:
Let's say I own 6.6% interest of 6000 mineral acres in the current Phillips/Burkley Well#1project. Can you show me how to calculate a monthly royalty $ if the well produces 20MMcf/d, gas (net after expenses) is $4Mcf, and the 640 acre unit is broken up 40% Phillips/60% Burkley . There is something in the contract (that I do not understand) that says we would get a 3/16 payout vs 1/8 payout on my royalty acres.
I'm going to make some assumptions: 1) you're a Phillips, and have nothing to do with the Burkley group, 2) that your minerals compose of the entire of the unit acreage in the well ascribed to Phillips, and 3) you leased at 3/16, not at 1/8:
6.6% x 3/16 x 40% = .00495 Unit RI
20,000 mcf/d x $4/mcf x 30.42 d/mo. x 0.00495 = $12,046.32 / mo.
Keep in mind that (1) this is a spot calculation based on an assumed flowrate, which flowrates will NOT remain constant, and (2) the fact that you own minerals outside of the unit has no bearing on your proportionate share of the proceeds derived from inside the unit, but that in no manner precludes you from being able to reap those benefits from any offset well(s) in which you might own interest(s), or your ability to buy, sell, or lease those minerals or royalties.
Hope this helps.
Also, if I sell say 25% of my royalty acres, what would my net mineral and royalty acres be after such sale
Thanks in advance
Flip Phillips
Also,