Yet Another Royalty Calculator Spreadsheet ......
In the attached file is yet one more Royalty Estimator spreadsheet....
First a disclaimer:
- This one still has some tweeking to do, so please do feel free to add input that might help improve things from what I have here so far.
- Use this for entertainment purposes only and don't make any stupid purchases or hasty financial decisions from what you see here or from any other Royalty Calculator. This one, and all others, certainly have their flaws so take that into consideration.
- Although this calculator uses recent Haynesville decline projections (as per HK's Feb 2010 presentation), that part of the equation is still really a big crystal ball at this point in time.
A few things to note regarding this version:
A. Decline curve is based upon HK most recent chart from their Feb 2010 Investors Presentation
B. Daily production decline is calculated each day for every given calendar year which, hopefully, gives a more accurate forcast than calculating the average monthly decline.
C. Well production is carried out for a 50 year period. Actual production might trickle onward longer or, perhaps, the operator might shut it down earlier if the annual maintainance costs end up exceeding income at some earlier date in time.
D. I have also included a section that would give some snapshot of what the royalty income MIGHT look like as in-fill production occurs in the unit. In-Fill production for this worksheet currently sets the in-fill production cycle at a rate of one new well at end of every 4th year.
E. Unfortunately, the calculations in this worksheet currenly have the annual decline curves as a static field. Ideally, it would be great to have that field modifiable so that any adjustments to the decline curve (upwards or downwards) could then be easier to calculate.
(Any math wizards out there who might be able to help with the algebra formulas for that function would be greatly appreciated!!!)
F. The In-Fill production cycle for adding Well's #2 - #8 is also currently static rate and assumes a value of adding one new well at the end of every 4th year. It would be great to figure out a way to be able to have that cycle period be a flexible field if the In-Fill production ends up proving to happen a a quicker or later rate in real life.
G. In-Fill production is also Static for these calculations in respect that royalty/production numbers generated for each additional well is calculated at exactly the same rate and royalty as the 1st well. That, of course, is not a real-life scenario. If I can wrap my brain around how to format the spreadsheet to allow for seperate IP/Gas Price/Acreage info for each additional well then I will repost an improved version at that time.
(Again, anyone with input on how to improve, please bring on your suggestions)
H. Gas Price is currently a Static Field as well and, of course, in the real world there will be fluctuations (hopefully going upwards as time marches onward).
Instructions:
A) Plug your own variable information in to the fields colored Yellow.
- Unit acreage
- Acres in Unit owned by you
- Initial Production Reported (or hoped for???)
- Price of Natural Gas
- Royalty Percentage per your lease agreement
- Discount Percentage (i.e. transport costs, enhancing, treating), if any deductions are required by the terms in your lease agreement
B) The output in the Green Fields will display the Royalty Estimates calculated
Any and all suggestions for improvement are welcomed.......
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Replies to This Discussion
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Permalink Reply by ledlights on
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Thanks D. Gaar, I (and my descendants) will take a couple of those 100 year paying wells.
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Permalink Reply by LP on
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Question: Are there any circumstances where a landowner's mineral interest would fluctuate or decline?
As strange as this question sounds, on my recent royalty check, my "payment decimal" is less than previous months. My land didn't get any smaller and my royalty % didn't change. As far as I know, the unit size didn't change. (unless I slept through an earthquake)
Am I looking/reading the check stub wrong?
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Permalink Reply by DJG on
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Has the operator increased the size of the unit? Sounds like a question to pose to the Owner Relations dept. with your O&G co.
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Permalink Reply by Skip Peel - Mineral Consultant on -
LP. Do you have a royalty interest in more than one drilling unit? Drilling units can be distinct and separate formations vertically. Many operators combine the HA with the CV and or SMK in their applications. These units although separate and distinct usually cover the same 640 surface acres. A mineral owner could have an interest in a shallow drilling and production unit that is less than 640 acres (320, 80, 40, etc.) and a deeper unit that is 640 acres. The royalty interest would obviously be different in that situation.
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Permalink Reply by LP on
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Skip,
I only have mineral interest in one unit. T15N R14W Sec. 19 and there is only one well in this unit, Kelley 19. My property is small, (less than 2 acres) but I don't understand why my mineral interest would decrease.
Here are the numbers:
Payment Decimal
July - Aug 2009 - .00055980
Sept. 2009 - .00054309
Oct. 2009 - .00054309
Nov. 2009 - .00050569
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Permalink Reply by Skip Peel - Mineral Consultant on
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This sounds like a question for ....... The Baron! Sorry, LP it's above my pay grade. And I'd like to know the answer also.
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Permalink Reply by LP on
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I will ask The Baron.
BTW, I emailed CHK and asked them. Their answer: "I have no idea".
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Permalink Reply by Linda Blunt on
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This is the best yet!!!! Thanks for your hard work!
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Permalink Reply by S.H.M. on
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"Royalty Multiplier for Well"
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Me, not being that knowledgable (and nowhere near a math wiz) what does "Royalty Multiplier for Well" field refer to?? I will prepare myself of the self-inflicted dope slap.
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Permalink Reply by DJG on
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S.H.
No "self-inflicted dope slap" necessary! It's a good question.
This number is basically the decimal point value that equals your percentage of ownership for that wells production.
Let's use the following numbers for example:
Unit Size: 640 acres
Your Land/Minerals: 100 acres
Royalty Rate per your lease: 25%
Then the percentage of your land in the unit would be 100/640 which is 0.15625.
Your Royalty Multiplier used for calculating your percentage share of the wells production would the 0.15625 (your percentage of your land in the unit) multiplied by 0.25 (which represents the agreed upon royalty percentage from your lease agreement) = 0.0390625.
So, using the example numbers above, if a mineral owner with 100 acres in a 640 acre unit who has a 25% royalty rate for their lease contract than they would have a 3.90625% stake (which is equal to the calculated Royalty Multiplier of 0.0390625) for that particular well.
So then, if the well did $100,000 in gas sales for a particular month then your royalty for that well for that month would be $100,000 X 0.0390625 which would mean that there would be a c heck totaling $3,906.25 (less any deductions) heading to your mailbox for that month.
Hopefully that helps to clarify things????
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