The Mineral Deed says Section 8,Township 18N, Range 3W containing 160.0 gross acres more or less....... What does the 160.0 gross acres refer to? In the paragraph above this it says .....undivided 13.3334 net mineral acre interest.... That must be what is owned.
It appears that the mineral conveyance is for 13.3334/160, but no one would warrant any advice or conclusion like that unless they read the instrument. The gross acres refers to the size of the tract, or quarter section.
A section is 640 acres, not 160 acres. Did you leave off part of the legal description? It should say "NW4, Section 8..." or "NE4, Section 8...", or something like that.
Yes, it says SE/4, Section 8, Township 18N, Range 3W, containing 160.0 gross acres, etc. That is what I am not understanding. A section is 640 acres, so what do they mean by 160.0 gross acres?
Perhaps Section 8 is being referred to in the lease as a geographic identifier. In other words, you own 160 acres of the 640 acres of Section 8, Township 18n, Range 3w.
You own a part in the Southeast Quarter of Section 8. So you effectively own a quarter section (1/4 of 640 = 160). As far as the mineral deed later indicates, you own an undivided percent of that 160 acres, which is 13.3334 Net Mineral Acres.
The 160.0 gross acres means the total number of "surface" acres, or acres of "actual land." As opposed to the "net mineral acres," which is your ownership fraction, which appears to be one-twelfth (1/12), multiplied by the gross acreage (160.0), which comes out to 13.3334 net mineral acres or "mineral acres" you have. Somehow you ended up with a 1/12 ownership of the entire 160.0 acres.
So if a company drills outside of the 160 acres, and their spacing is 640 acres, would I still receive revenue from any production they find? If so, then how would you figure it to be?
The original is answer is correct. She owns 13.3334/160, or .08333333. She owns that because that is what her deed says. There is no mystery there. No one ever said a section was 160 acres. Someone did say that no one could give her the absolute right answer unless they read the deed. She corrects the legal, but the original answer was still right. 13.3335/160 = .08333333. 1/12th = .0833333. It's the same interest.
The short answer is yes, if "your" 160 acres is a part of a 640 acre unit.
They don't need to drill on that quarter section for you to receive royalties.
I'll pass on the second part.
Jackie Enkich Lechwar said:
So if a company drills outside of the 160 acres, and their spacing is 640 acres, would I still receive revenue from any production they find? If so, then how would you figure it to be?
Ok, thank you for clearing that up for me. I think I know how to figure it from other questions I've asked and received answers for. I would say I'm not ready to like go into the oil business, or anything quite yet. Thanks again.
The original legal description she posted was for a full section (640 acres), not a quarter section (160 acres). I never said the original answer was wrong, I just sought clarification on the legal description because if the actual legal was for 640 acres then the conveyance was for 1/48 of the 640, not 1/12 of the 160.
Dave Quincy said:
No one ever said a section was 160 acres.
I don't think you can get there from here, based on what she posted. I gave her the correct mineral interest. It's 13.3334/160, or a decimal interest of .0833333. I also advised her that 160 acres is a "quarter section", not a section. But most importantly, I told her that the deed would need to be read to be certain of anything. It's good that she clarified it for you, but it was clear from the information that she provided initially that she was being conveyed an interest in a quarter section. The deed didn't mention a fractional interest of 1/12 or 1/48. If it had, my reply would have been different. The denominator was clearly 160 based on the facts as presented. The actual legal, we learn, is the SE/4. The original legal was apparently intended to be an abbreviation, or a cursory legal, for general descriptive purposes. However, after all is said and done, the original answer is correct. Am I surprised? Not at all.
Please bear with me. Say the production for a particular well is $100,000 for a month, just say, if my ownership is 1/12, or .0833333, is my royalty 1/12 of the $100,000??? Or is there some kind of other dividing done here to get to the total royalty?
No, you would have to factor in the size of the unit, the number of acres you have in the unit, as well as the royalty and terms and conditions surrounding it in your lease. Your formula does not do that.
Unit size 640, I have 13.3334 acres in the unit, royalty I think is 3/16.....terms and conditions I don't know.
Google how do I calculate oil and gas royalties, or oil and gas royalty calculator. They give you a calculator and you enter all the information and it will project your estimated royalty for you.
Ok, thanks.