In 1985 my parents purchased 160 acres of Grady County mineral rights from a friend. All that is producing currently are a few gas wells. The court documents that I have recently received show only sixty-seven royalty owners and yet my Division rate is .007… Can someone please shine a light on the process of setting Division rates.
Your royalty is based on your lease’s royalty percentage and the spacing of the production unit. Example: the well is spaced 640 acres and you own 160 ÷ 640 = .25 x your royalty if 3/16 or .1875 x .25 = 0.046875 is your royalty interest. I came to.
I don’t know how they came up with .007.
Thanks very much, Curtis. That is such a large difference, it merits checking out.
Look at the lease to see the royalty rate which may be as low as 1/8. You also need to research to determine if your parents actually purchased 100% of 160 acres or some lesser fraction of the minerals. The friend may not have owned all the minerals or may have retained some fractional interest. A deed will always describe the gross acres - in your case 160 acres - but in actuality it will be limited to the interest owned by the seller.
3 Likes