Royalty Percentage Negotiations

joseph schwartz · 2011-03-10T01:28:38Z

Hello. I was wondering if there are any indicators by which to recognize an appropriate, or inappropriate royalty percentage on a division order. I ask because I just received a division order from my second lessee in about six months. My decimal interest from the first lessee was something like .00033462 and the monthly royalties from that company seemed, from a layman's perspective, to be quite low compared to the lump sum that they offered to buy me out. The decimal interest from the second lessee on the division order which I just received is .0001473. Just wondering if there is any gauge or standard to tell if the royalty percentage is fair. There are, I believe, 32 acres in the Bakken on which I have mineral rights. I don't want to start negotiating and seem unreasonable, but also do not want to get undercut which I assume is not totally uncommon given that these firms, understandably, seek to maximize profits in every case. Thanks a lot!

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