I am familiar with the DI calculator, but need to know how to factor in the NPRI percentage that was given to me by the oil company we are dealing with.
A NPRI is absorbed by the royalty owner to the extent that it does not exceed their royalty. For example, if the NPRI was 20% and the lease provides for 18.75%, then the lease royalty owner receives nothing and the oil company's net revenue interest is 80%.
SO, if the NPRI is .0325 and your royalty is .1875, then your share of production would be .1875-.0325= 15.50%.
Thanks for filling in a big gap in my calculations, Buddy!
Buddy Cotten said:
A NPRI is absorbed by the royalty owner to the extent that it does not exceed their royalty. For example, if the NPRI was 20% and the lease provides for 18.75%, then the lease royalty owner receives nothing and the oil company's net revenue interest is 80%.
SO, if the NPRI is .0325 and your royalty is .1875, then your share of production would be .1875-.0325= 15.50%.
Buddy Cotten
Big sigh…Please help me answer my sister’s question regarding NPRI, which is: “I don’t know why it would come from Dad’s royalty interest percentage…looks like his percentage would be his percentage.” I have given her the information you gave me, Buddy, plus a definition of what NPRI is, but she’s still questioning things. Is there some law I can quote to her? During lease negotiations, we asked for a non-pooling clause, but since we have horizontal wells, the oil company would not agree to that, which I can totally understand.
KD said:
Thanks for filling in a big gap in my calculations, Buddy!
Buddy Cotten said:
A NPRI is absorbed by the royalty owner to the extent that it does not exceed their royalty. For example, if the NPRI was 20% and the lease provides for 18.75%, then the lease royalty owner receives nothing and the oil company's net revenue interest is 80%.
SO, if the NPRI is .0325 and your royalty is .1875, then your share of production would be .1875-.0325= 15.50%.
Buddy Cotten
Dear KD,
The answer is that the NPRI was created from the mineral estate that your father owns. Therefore, he either acquired the property with an outstanding NPRI, or he conveyed an NPRI from his mineral estate. That is the reason that it comes from his share. This is not a burden on production created by the oil company.
Sometimes, people just have to understand that it is what it is and whether it makes sense or not to them really does not matter. That's just the way it is.
KD said:
Big sigh...............Please help me answer my sister's question regarding NPRI, which is: "I don't know why it would come from Dad's royalty interest percentage...looks like his percentage would be his percentage."
Thanks again, Mr. Cotten. You have NO IDEA how helpful your statements were in helping my family understand the situation our father is in. 
and a big hug from me to you!
Buddy Cotten said:
Dear KD,
The answer is that the NPRI was created from the mineral estate that your father owns. Therefore, he either acquired the property with an outstanding NPRI, or he conveyed an NPRI from his mineral estate. That is the reason that it comes from his share. This is not a burden on production created by the oil company.
Sometimes, people just have to understand that it is what it is and whether it makes sense or not to them really does not matter. That's just the way it is.
Buddy Cotten
KD said:
Big sigh...............Please help me answer my sister's question regarding NPRI, which is: "I don't know why it would come from Dad's royalty interest percentage...looks like his percentage would be his percentage."
That is the nicest thing anybody has said to me all day.
Thank you very much. My reward is to feel appreciated.
KD said:
Thanks again, Mr. Cotten. You have NO IDEA how helpful your statements were in helping my family understand the situation our father is in. ;) and a big hug from me to you!
Buddy - once again THANK YOU for this clarification - I've been reading on this forum for YEARS and did not fully understand the below till recently ( seems a NPRI has 'arisen' from the shadows on my inherited minerals; thought the oil-co was trying to cheat me on a division order...).
Buddy Cotten said:
A NPRI is absorbed by the royalty owner to the extent that it does not exceed their royalty. For example, if the NPRI was 20% and the lease provides for 18.75%, then the lease royalty owner receives nothing and the oil company's net revenue interest is 80%.
SO, if the NPRI is .0325 and your royalty is .1875, then your share of production would be .1875-.0325= 15.50%.
Buddy Cotten
Exactly. I was doing curative work, tracking down a very large set of heirs to an NPRI. From my experience, in every group of heirs greater than about two or three there is at least one person who just will NOT accept reality. One of the heirs in this case just would not accept my interpretation of the Royalty Deed that his wife's grandmother had signed back in the 1930's. If I recall correctly, he thought it was a Mineral Deed, which of course would entitle his wife to more than just a royalty stream of income. He said he was going to get a lawyer, I said fine. He said the lawyer agreed with him, I said fine but we weren't going to change anything. He said that he would take us to Court, I said fine and we never heard from him again. In his defense, it was a very tricky wording. But I did alot of research on it and know our interpretation was correct, especially in light of subsequent actions that the grandmother had taken regarding the same tract of land. He was a lawyer himself, so maybe he couldn't help himself.
Buddy Cotten said:
Dear KD,
The answer is that the NPRI was created from the mineral estate that your father owns. Therefore, he either acquired the property with an outstanding NPRI, or he conveyed an NPRI from his mineral estate. That is the reason that it comes from his share. This is not a burden on production created by the oil company.
Sometimes, people just have to understand that it is what it is and whether it makes sense or not to them really does not matter. That's just the way it is.
Buddy Cotten
KD said:
Big sigh...............Please help me answer my sister's question regarding NPRI, which is: "I don't know why it would come from Dad's royalty interest percentage...looks like his percentage would be his percentage."