In 1985 my parents purchased160 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 intrest 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.