I am trying to figure out the answer to this question… — and what considerations I’m overlooking —-> If farmer “F” told company “C” that it had “X” number of mineral acres, Company “C” then asks for check stub from an override “F” owns from an assignment that “F” made a few years back to Company “CC,” whom currently operates a producing well on the section of interest, could “C” determine or verify acreage “F” claims to have based upon the information solely from the check stub, and if not, what other information would “C” need to accomplish this? __________Thanks in advance for any help.
Dear Mr. Wyatt,
There are some items left out of your example. One major item left out is the nature of the overriding royalty. If the overriding royalty only applies to one lease, that will be pretty easy to reverse engineer the mineral interest derived from the check stub. Another item would be unit size.
If, by overriding royalty, you mean the lease royalty paid underneath the oil and gas lease, you would be misusing the term overriding royalty. That would be a red herring for those who do understand oil and gas definitions.
Examine the spreadsheet contained here:
Incidentally, this is not genius level calculations. It is simple algebra, once you understand, or you are provided, the formula for calculation of the decimal interest payable underneath a well pay deck..
Best wishes,Buddy Cotten
640 is the unit size and I do think it applies to only 1 lease. How can you verify how many leases it could possibly apply to? Thanks for the help.
Enjoyed your post; in trying to interpret, I begin to understand why they said "Algebra" is important in life, logic to, if you got schooled in it. I grew up in the lost generation, where they were trying out the concept in schools of "modern math" it didn't work, and they stopped teaching it.