Just received a division order for out mineral rights pertaining to Section 29 and 32, township 7 North, Range 15 East in Pittsburg County, Oklahoma and wonder how the division of interest is calculated, looks really small percentage
Take a look at this page: Oil & Gas Royalty Calculator – Calculate Your Decimal Interests
If you use the Calculator, be very aware that is only for one month. Wells decline over time, sometimes rapidly and prices fluctuate wildly as we have seen recently.
The Formula for the Decimal amount on the division order is:
net acres/spacing acres x royalty x % perforations in you section.
If the well is a single section well, then the last term is 1.00. If the well extends over more than one section, the OCC will have an order that states the percentage. Double check to make sure that the Division Order has the same percentage as the order. I have had a few that do not and have to send them questions until it is resolved.
So an example would be: 10 acres, 640 spacing, 3/16ths well, single section.
10/640 x .1875 x 1.00 = 0.00292969
Simply put Net Minerals Owned / Spacing * Your Royalty Rate = Your pay decimal Example: 16 Net Mineral Acres / 640 acre spaced well * 3/16 Royalty (.1875) = 0.0046875