Net Mineral Acre - How to Get Smart About NMA


#1

I just realized that after tracking down mineral rights, making new leases, etc, that NOWHERE on any papers I have accumulated (over an inch thick now) is NMA recorded or even mentioned!. I recently leased for instance 160 acres, but that lease leaves me totally in the dark of what my NMA number is. Can someone guide me as to where I can see this number or how to calculate it?


#2

@DonFromTexas The best place to start which will produce immediate results for you is to perform a search on this site for the key phrase “net mineral acre”, and review the summary results. This site has a lot of valuable information that has already been posted.

The search function is quite good here, and for most people, should be their starting place.


#3

It was for me the prime search area… First tried NMA then Net Mineral Acre. I was never able to determine how it is calculated, and the numerous comments that is so complicated that you need an attorney and a landman and a couple thousand dollars just served to aggravate me more.
Two companies tracked me down and paid a bonus for a lease. I fail to understand how they could determine that amount without some idea of my NMA.
My chain of ownership is really quite simple I think. The grandfather that initially did the wells back in late 20s, early 30s probably shared mineral interests with the surface owner and the well driller. He then willed his interests to the father, who then willed them to his 5 children. Am I correcct in my assumptions? In that case it would seem to be simple math to determine the NMA.
It is insinuated that when a company strikes oil, they THEN make a determination of NMA on a “Division Order”, and apparently divulge their computation result to the mineral owner at that time. Is that correct? I of course have not been able to obtain that information on the producing wells we inherited. …


#4

Hey Don, I understand your frustration. Most leases I have signed state the amount
per net mineral acre. Just received a lease offer stating a total dollar amount, but
not stating what they are paying per net mineral acre. I will call the company and ask how much per NMA before I sign the lease. I will watch for your post in the
future. Hope all goes well.

Woody Kent Cowan


#5

Mineral Acre?[quote=“Buddy_Cotten, post:5, topic:28906, full:true”]

A mineral acre is the full, undivided Ownership in one surface ownership of land. (This is simplified.)

If you have a 25% Ownership Interest in 100 access, then you would own 25 net mineral acres under 100 gross acres.

Why don’t you see net mineral acres in your document? Because it is an element of calculation, not the result that they are expressing, i.e., your decision of production.

Best,

Buddy Cotten
Mineral Manager


#6

But straighten me out if I am still wrong here. If I owned for instance free and clear 640 acres of mineral interests, and a producer put in a well and his permit was for say only 40 acres. I would get paid for the 40 NMA only, not the whole spread?


#7

You would be paid on your NMA within the total well acreage times your royalty rate. So if you own 100% of the 40 acres at 25% royalty, then your royalty will be 40 / 40 X 0.25 = 0.25. If you own 1/2 minerals in the 40 acres = 20 NMA, then your royalty will be 20 / 40 X 0.25 = 0.125. The calculation of your royalty is based on the gross acres in the well and your fractional interest in those gross acres. Assuming that your lease only allows the lessee to hold the 40 acres under the well, then at the end of the continuous drilling period, the lease on the remaining 600 will expire and you can lease again.


#8

I THINK I can see it coming thru the fog. So I am thinking in the example, that the Lessor would have leased the whole 640 acres, then as wells were permitted and completed, my royalties would be based on the permitted acreage of each well.?


#9

Acreage could be determined by your lease. For example, does it only allow 40 or 80 acres per vertical well? Or does it allow lessee to set the acreage? Or specify RRC field rules as in Texas? Or is assigned acreage set by the NMOCD? But no matter, royalty DOI is based on your fractional interest in the acreage in the well. (DOI is your decimal interest)