as a new mineral rights owner, my siblings and I want to know how the oil companies figure the percentage of money due to us???? Is .0004821 a common amount to be paid? We have four producing wells and we get very little of what they make off those wells.
Ms. Weis, that is a fairly small interest in and of itself, I sincerely hope you are not splitting that. If I'm doing the math correctly that decimal interest would mean you are getting production of 6/10ths of an acre in a 1280 or 1.234 acres in a 2560 acre spacing. The bad news doesn't stop there. Your production is subject to 11.5% combined severance and production tax and the operator may be taking deductions from your royalty, state and federal income taxes will apply also. The price you get for your oil may be low right now also. Wells also decline, what may look good for the first year may not look so good in the second or third year. The productivity of each well varies as well as how the operator produces them. Many people are shocked by how little they realize from their lease. I think many people would decide to leave it in the ground if they actually knew what they would make from leasing their minerals.
r w is correct. unless you own all or most of the mineral rights, you don't get much. but, the idea is nice for a while until reality sets in. I'm playing the waiting game right now . the oil co. needs to make sure my no production costs is worded correctly. I understood it just fine. that appears to be the only hold up for now. land man has not gotten back to me for 2 weeks since our last conversation. have a feeling they don't want to give me what I want or don't want for that matter. but the 'good news is' they have stepped up the date they want to start drilling. we shall see.
Not all that glitters is gold. Sometimes it is just a big headache. Petroleum companies show up with a lot of enthusiasm and glad hand landowners. Then later, the reality sets in. If you made a bad deal with a crooked company, you just have to live with it.
Then they show up and make a mess upon the land, dig ditches and put pipes everywhere. They act like they own the place.
Sometimes the highest and best use for land is not mineral production. I sure wish I had opted for a pecan grove rather than a bunch of non paying oil and gas wells. Sometimes, it is best to just say "NO!"
Vicky,
You are getting the equivalent of 3.3 net mineral acre lease at 3/16 royalty for a well on 1280 spacing. RW is right on, it just goes down hill from there depending on the terms of your lease. There is a lot more to leasing than collecting the best bonus you can get.