1/5 Royalty - What does it mean?

What does 1/5 royalty interest mean? 1/5 of what.

Basically, with a lease referencing 1/5 royalty, you are entitled to 1/5 of the proceeds from the sale of products attributed to your percentage of mineral ownership. If you own the entire acreage the well is producing from and they sell $500,000 in product, you get $100,000. If you only own 64 acres of the 640 the well is producing from, you get $10,000. Of course taxes and any fees you agree to would be deducted from this payment.

Thanks Rick. We are only talking about mineral rights for 1 1/2 acres, which seems to be a very small amount of proceeds.

You might be surprised. Some small acreages produce healthy royalties. You won’t be buying yachts but it will help with bills.

What county and state are your minerals in?

Love County, Oklahoma

It means you will be receiving 20% payment on the production of the wells.