Calculating net revenue interest

DResearch · December 12, 2019, 3:45pm

I need help calculating net revenue interest of the working interest owner? Is there a formula for this type of problem?

A working interest owner owns 100% of an oil and gas lease subject to a 3/16th royalty and a 1/16th overriding royalty. The lessor of this lease owns 100% of the mineral interest. What is the net revenue interest of the working interest owner?

Steve_Durrett · December 12, 2019, 4:12pm

The total burden is 3/16 + 1/16 = 4/16 or 1/4. Therefore the WI Owner has a 75% NRI.

DResearch · December 12, 2019, 4:27pm

Thank you. Tried a few different ways and wasn’t sure if I was right or not. Appreciate the help.

TODD_M_Baker · December 12, 2019, 7:24pm

Steve is correct. Simply subtract the total lease burdens from 100%.

system · February 10, 2020, 3:45pm

This topic was automatically closed after 60 days. New replies are no longer allowed.