Dear Mr. Montgomery,

You say that the "drilling unit on the lease shows 656 acres." That is past unusual that a drilling unit would be specified on an oil and gas lease.

I am going to hope that you meant that there is a pooled unit of 656 acres.

Taking everything that you have said at face value, it appears that you have a 20 Net Mineral Acre interest in a POOLED UNIT -- not drilling unit.

A discussion of the various types of units in Texas are discussed here:

http://www.mineralrightsforum.com/profiles/blogs/the-basics-of-pool...

With the assumption above that a pooled unit was formed to be 656 acres in size. Assuming that you have no burdens against your royalty interest, your share of production should be:

20/656*.25, or a decimal interest of 0.00762195. If a well was brought in that averaged 1000 bopd over a 30 day period, your share of production would be 228.68 bbls of oil. If the average sales price was $45 for that 30 days of oil sales, then your gross share of production would be $10,289.63.

Taxes and perhaps operating costs would be deducted from that figure. An interpretation of the lease terms would be in order to know for sure.

This can be easily calculated from the division order spreadsheet which I gave a link to on my earlier response.

Best,

Buddy Cotten