I’m trying to calculate the decimal interest for a Division Order that involves one entire section (639.54 acres in my case). I own ½ of 1/8 royalty interest in NE/4 NE/4 and ½ interest in N/2 N/2 of the section. I conclude 1/16 of 40= 2.5 NMA and ½ of 160= 80 NMA. My overall percentage of the net acreage is 82.5 divided by 639.54 which equals 0.128998968 times royalty interest 3/16 ( 0.1875) equaling 0.024187306. Finally, though I didn’t mention until now, divided by 4 equally sharing siblings coming to 0.0060468266 per sibling.
Some of the calculations were decimally longer numbers, too long to mention here, but I worked them in with the calculator.
The decimal interest we each received from oil company is 0.00577344. The difference in favor of oil company is 0.0002733866.
Was my math correct? Have I overlooked other mysterious variables?
I intend to call the company’s preparer to get an explanation of how they arrived at their percentage before I agree to sign the order.
Thanks for any input.
Arthur
Are you sure about the ownership, and the two descriptions overlapping? NE/4 NE/4 falls within the N/2 N/2. Not impossible with two transactions when it was acquired many years ago, but not that common either.
Also if the deed shows 1/2 of 1/8 "royalty interest" you may not even be looking at a mineral deed.
While not exact, the number on the division order is very close to what I come up with on the N/2 N/2 . I get .00586389 vs their .00577344
My math matches yours for the total. It looks like they are figuring on ~78.77NMA acres.
Rick, thanks for your comment.
My information comes from a detailed list of mineral interest assets given to me by an Oklahoma trust bank for inheritance documentation.
I think you are correct in that my 2.5 acreage is Royalty Interest and the 1/2 interest in N/2 N/2 is purely a Mineral Interest description. I see "Mineral Interest Type: " followed by either Mineral Interest or Royalty Interest in these descriptions. However, some properties are Mineral Interest which are "leased and producing" and some are Royalty Interest which are "leased and producing" so it's a bit confusing. I also discovered one property indicating I owned all mineral rights in a S/W section for a whopping 160 acres but researched on my own to find that someone else shared half. While most of the bank descriptions have concurred with identical acreage figures between me and lessee, usually through bonus calculation, I still need to authenticate them with a landman. County Clerk Office time.
The 1/2 MI of the N/2 N/2 section was in Logan 5-18N-3W and lately that's been a pretty active area so the percentage calculation difference can become significant in a productive future. Perhaps since section 5, being located in the northwest corner, accounts for some acreage modification that brought the 80 acres down to 78.77 like you calculated.
I'll keep at it and see if DO preparer is willing to offer any clues.
Thanks again, Rick.
Arthur
Arthur,
Is this property on a correction line or something? Your bank may refer to it as 160, but it may only have 157 A due to correction line. I have a couple farms referred to as 160, but one is 154 and the other is 157.54. Oil companies have it surveyed and only pay on the A that you own.
Arthur, Virginia is correct, the N/2 N/2 is comprised of lots 1-4, being 39.76, 39.84, 39.93 and 40.01 gross acres respectively, which equals 159.54 gross acres. The NE/4 NE/4 is also described as Lot 1, which is 39.76 gross acres.
159.54 x 1/2 = 79.77 NMAs in the N/2 N/2
39.76 x 1/2 x 1/8 = 2.485 NMAs in NE/4 NE/4
I also agree with Rick, in that it appears the operator is only paying you on 78.77 NMAs. So on the outside looking in if I were to make a guess, I would say that the operator calculated your interest in the N/2 N/2 as though 2 acres were carved out of it. Thus making it a 157.54 gross acre tract.
157.54 x 1/2 = 78.77 NMAs
And as for your interest in the NE/4 NE/4, they are simply not crediting you with any interest in that tract.
I would ask the operator for the pertinent pages of the Drilling Order Title Opinion (DOTO) regarding your interest, including, if any, title requirements that may affect your interest.
And if you do own a royalty interest in the NE/4 NE/4, then you need to know if it's a fixed or floating non-participating royalty interest (NPRI), because it will affect how it is calculated. Right now you are calculating it as though it's a floating NPRI, 1/8th of the royalty, or 1/8 x 3/16th royalty.
I hope that helps.