First, you left out some required info. The number of acres in the spacing unit (usually 1280; sometimes 640) and your % royalty. If you will google "Mantra Land Services"; click on "Resources"; find the Oil and Gas Calculator on the left side of page; click on this and plug in your numbers in the Oil Calculator section (second section). Keep in mind, severence taxes, etc. will effect your royalty payment. Hope this helps.

Your participation in the unit is relative to the size of the unit, for instance 80 acres represents 25% of a 320 acre unit and if, and I repeat if, all the royalty is the same in that unit, say 1/5th, you would recieve 25% of 0.2000 X 300 BOPD x 30.4 days a month x 90.00, or about 41,000.00 dollars. If the unit size is bigger your interest is diluted; 80 acres over 640 acres, by example, means you recieve only 1/8th the total royalty, or 12.5% of 0.2000.

Based on the figures you provided, this is what I come up with: #1 = $52.08/day ; #2 = $65.10/day ; Are you sure this 680 unit should not be 640 (which is norm); on 640 this would be $55.34/day. Of course, these figures are before deductions (severence taxes/transportation, etc.)

170/640 (net acres/unit acres pooled)=.265 x .20 (1/5th royalty)=.053 x .020 (1/48th my part)

=.001 x 100.00( if cost of 1 barrel of oil)=.106 x 500 (barrels a day production) =55.34 /day x 30 days = 1660.00 a month x 12 months = $19,920 a year

and on 320 acres unit acres

100/320 (net acres/unit acres pooled)= .313 x .20 (1/5 royalty)= .063 x .020 (1/48th my part) = .001 x 100.00(if cost of 1 barrel of oil= .125 x 500 (barrels a day production) = 62.50 /day x 30 days = 1875.00 a month x 12 = $22,500 a year for both it would be about $42,420.00 a year

and this is for a non-participating royalty owner. is this how you came up with the amounts

I use an oil and gas calculator whereas I just plug in the numbers. nancy peterson said:

I believe the 640 is correct, so it would be

170/640 (net acres/unit acres pooled)=.265 x .20 (1/5th royalty)=.053 x .020 (1/48th my part)

=.001 x 100.00( if cost of 1 barrel of oil)=.106 x 500 (barrels a day production) =55.34 /day x 30 days = 1660.00 a month x 12 months = $19,920 a year

and on 320 acres unit acres

100/320 (net acres/unit acres pooled)= .313 x .20 (1/5 royalty)= .063 x .020 (1/48th my part) = .001 x 100.00(if cost of 1 barrel of oil= .125 x 500 (barrels a day production) = 62.50 /day x 30 days = 1875.00 a month x 12 = $22,500 a year for both it would be about $42,420.00 a year

and this is for a non-participating royalty owner. is this how you came up with the amounts

Regarding your statement "Assuming that there is no non-participating royalty interest on his 80 acres.", a few questions (and I am still waiting on my well to arrive)..... 1) How can I find out if there is non-participating royalty interest?, 2) How does it affect the calculations?, 3) How "normal" is it to have Non-participating Royalty interest in a well/unit/etc.?

how does the nonparticipating royalty interest affect how you figure pay for 500 barrels a day, did you get a chance to look at how i figured the 2 wells we have with non participating royalty interest, did i figure it right?

Buddy Cotten said:

Assuming that there is no non-participating royalty interest on his 80 acres.

(NA/UA) x LR x MP x $= Check, then less costs, taxes, etc

If you have strictly a non-participating royalty interest, the formula can go two ways. If you ratify the unit (which I think is the right thing to do, even if drillsite), the formula would be:

(NA/UA) x NPRI x MP x $= Check, then less costs, taxes, etc

NA Net acres

UA Unit acres

NPRI Non Participating royalty interest.

MP Monthly Production

$ Sale dollar per unit

Here is where it can get a little tricky. If your NPRI is reserved as a express royalty figure (such as "I reserve, as royalty, the equal 1/48 part of all oil, gas and other minerals which may be produced..."), then your NPRI is 1/48th.

If the reservation is created as a percentage OF royalty (such as "I reserve, as a Non Participating Royalty Interest the equal 1/48 share of the oil and gas royalty. If Grantee elects to develop the minerals in lieu of lease, then I am entitled to the equal 1/48th share of production"), then your NPRI would be calculated by (NPRI x Lease Royalty).

It even gets a bit more complex than that, but this is the basics only. I could keep typing for a long time on this subject.

I have a question when it comes to this post and regards to horizontal drilling and multilateral wells.

How do the oil companies ensure that they are not draining oil from mineral acreas nearby when they are producing from a horizontal well. Do they have to lease all mineral rights in a a certain area near the well to ensure this or ??