Can anyone explain how the a division order interest is figured out?

Thanks,

Lou

Can anyone explain how the a division order interest is figured out?

Thanks,

Lou

It should be your royalty % (say a 1/8 royalty = 12% = 0.125)

multiplied by the % of interest you own in the mineral rights. If you own all, then 100% =1.00

that would be 1 times 0.125 or 12.5 % of the proceeds (however defined in the lease such as at the wellhead price etc.)

If you inherited from a grandparent who owned the whole interest, but there were 5 grandchildren who inherited equally, then you have 1/5 = 0.20 = 20% of the royalty %

so for a 1/8 royalty it would be 1/5 of 1/8 = 1/40 = 0.025 or 2.5% of the proceeds

The division order for the first would say 0.125 and the second would say 0.025

Typically your "payment decimal" or "Net RI" or "Royalty Interest" is calculated by:

[your net acreage] / [the total acreage in the pooled unit] * [the royalty % set forth in your lease]

So if you own 30 acres out of a 300 acre unit and have a 25% royalty, your pay decimal would be:

30/300*.25 = .025. Translation: you own 2.5% of the net royalty income from the well(s) before deductions are taken from your share, if any.

Thank you so much!

Lou

Nancy Mosley said:

It should be your royalty % (say a 1/8 royalty = 12% = 0.125)

multiplied by the % of interest you own in the mineral rights. If you own all, then 100% =1.00

that would be 1 times 0.125 or 12.5 % of the proceeds (however defined in the lease such as at the wellhead price etc.)

If you inherited from a grandparent who owned the whole interest, but there were 5 grandchildren who inherited equally, then you have 1/5 = 0.20 = 20% of the royalty %

so for a 1/8 royalty it would be 1/5 of 1/8 = 1/40 = 0.025 or 2.5% of the proceeds

The division order for the first would say 0.125 and the second would say 0.025

Thanks so much for the info!

Lou

A. Loren said:

Typically your "payment decimal" or "Net RI" or "Royalty Interest" is calculated by:

[your net acreage] / [the total acreage in the pooled unit] * [the royalty % set forth in your lease]

So if you own 30 acres out of a 300 acre unit and have a 25% royalty, your pay decimal would be:

30/300*.25 = .025. Translation: you own 2.5% of the net royalty income from the well(s) before deductions are taken from your share, if any.

I have a division order question...probably need someone who knows the TX law as it relates to 'life estate'.

thank you,

Bill