Royalty Interest number and acreage

Hi, Can someone tell me how to calculate how much acres I have from the Royalty Interest number provided by the Company?

For example: Royalty Interest number is 0.00016351

Tim: Need more information, ie, Unit size, royalty percentage & whether 640 acre unit or multi-section unit. If multi-section unit, the percentage of participation for the unit that your minerals are under. If you have the DO, this information should be on there.

Then we can get your the answer to your question.

Example for you, base on 3/16ths royalty and 640 acre unit: 0.00016351 X 640.00 divided by 0.1875= 0.558114 net acres.

Todd M Baker

Tim, The formula for arriving at royalty interest is spacing unit (size of drilling unit-you can look this up on the OCC Production website) divided by net mineral acreage (this of course is what you’re wanting to find) times royalty from lease (you can get this from lease or revenue statements) time % of perforations if the well is multi unit (most horizontals are 640 acre spacing) = royalty interest (RI as read off your revenue statement). So for example 640/3.33 * .125 (1/8th royalty) * 1 (assuming 100% perforations) = .0006503. So once you have all the variables just plug in simple algebra equation and solve for net mineral acreage (nma).

here’s a little more info

The property name is SINCLAIR 1-15-22XH We got pooled by Continental and are awaiting answers from them also. But does name of well help any?

also property description: Sec 15-4n-5w (48.22%) also Sec 15 (640)

Carl: You simple algebraic equation contains an error: should be 3.33/640 * 0.125 * 1= 0.006503. Just transposed the 3.33/640.

Would this be correct? 10.5 acres (my interest)/640 x 01875 (3/16) x 50%. (Assuming division is 50/50 with section 3 as projected.) = 0.0015381

Grace, You wouldn’t apply the 50% unless the well is a multi-unit such as 1280 acres. Some of the newer horizontals are indeed two section wells and you should be able determine that from the well information off of the OCC site

Grace- you are correct. Carl- because Grace’s minerals are under a 640 acre unit that is only 50% of the multi-unit, you have to take 50% of the normal NRI to get the correct decimal. If it is a 1280 acre unit, the calculations would be 10.5/1280 x .1875.

Thanks guys! The way I figure it I will get about .08 for each barrel of oil. I can’t get too excited about that.

In a multi-unit well would the % of perforations in each unit be the multiplier vs. the 50% of the normal NRI?

Lee- the 50% is only an estimate before the well is drilled. Use the actual percentage when the final order is signed. Not sure what you mean by normal NRI.