DIVISION ORDERS

CAN SOMEONE EXPLAIN WHAT BPO NET AC 0.822395 MEANS 640.028104 UNIT ACRES

BPO LSE NRI/RI 0.25000000

BPO UNIT INT 0.00032122

EVANS 31-9-13 1H SECTION 31-9N-13W I TRIED TO CALCULATE BUT DONT UNDERSTAND.

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landownerPermalink Reply by RONNY on February 24, 2013 at 2:05

.822395 / 640.028104 x ,25000000 = .00032122.  Your royalty payment will be the total dollar amount of gas sold each month multiplied by .00032122 (your decimal interest in the unit) ,minus any expenses allowed according to your lease language.  If you do not have cost free royalty language in your lease you can count on approx. 20-25% expenses being deducted each month from your check for transportation, gathering, etc..  I am but a rookie, if any of my info is wrong someone will be along to correct me.  Good luck to you and congratulations on being a mineral owner.


landownerPermalink Reply by Henry on February 24, 2013 at 2:10

Here's my take.  I think they are telling you that you own 0.822395 acres in this section.  And the section is not exactly 640 acres as we like to think they all are.  Rather, your section has 640.028104 acres in it.  Thus, the fraction of the mineral rights in the section that you own is .822395/640.028104 = 0.001285.

And, since your royalty is 25% (that's the 0.2500000 number), if you want to know what fraction of production is yours, you multiply the fraction of the minerals you own by 25% (0.25 X 0.001285), and you receive 0.00032122 (or 0.032122%) of the production as your royalty.  

So if you look at the total production numbers on sonris (or your statement when it arrives), you multiply that number by 0.00032122, and that is your share of the gas.  Multiply that number by whatever price it is sold for, and that is how much money you will receive.


landownerPermalink Reply by Henry on February 24, 2013 at 5:06

Ronny made a good point....  There will likely be deductions taken from the number I gave you.  This would be the "gross" payment, and your operator may (depending upon your lease terms) take deductions for things like marketing, transportation, etc.  Your "net" payment could be less.


Oil & Gas ProPermalink Reply by Andrew on February 24, 2013 at 11:20
"BPO" stands for "before payout." This has no significance to your situation because you'll have the same interest after payout.

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