Calculating Price Per Barrel


#1

How does my producer calculate the price per barrel on my royalty statement? Is it based on an average price for that month? Or the price on the day the sales transaction took place? Or…?


#2

In general, it is an average price over the month which is calculated under the terms of a contract between the operator and the purchaser. There are also factors such as demand at Cushing OK that can affect the price.