Starting with math, please

Oil and Gas Leasing Help
#1

I’m a mineral rights owner with one if the three proposed wells producing. I do have a math question regarding ownership anounts of mineral interest! Need HELP desperately

#2

What's your math question? I'm a Sr. Division Order Analyst who works Colorado & Texas. Here is a formula to calculate your net revenue interest.

NRI = mineral interest X royalty interest X (tract acres / unit acres)

#3

I inherited an undivided 1/4 mineral interest of 103.719 acre tract and 8.1 acre tract And An undivided 1/4 of undivided 1/2 mineral acres of 111.3 acres

Wouldn’t my ownership amount nee a little different from each other?

Also, fyi, royalty amount is 1/5 612 acre unit, with us having the anode, a 213 acre tract

#4

Dear Ms. Johnston,

I am familiar with the term anode as it applies to chemistry, but what does an anode mean as it applies to a tract?

Other than that, I think that you are getting at is that you say you have ownership is in a 213 acre tract that is part of a 612 acre unit. You cannot figure your net revenue interest, or decimal interest, with the information that you have given, as it appears that your ownership varies in the tracts listed and the sum of those tracts total more than 213 acres.

In tract 1, 103.719 acres, you say you own 1/4 mineral interest. That leaves you with 25.92975 net mineral acres in that tract.

In tract 2, 8.1 acres, you say you own a 1/4 mineral interest. That leaves you with 2.025 net mineral acres.

In tract 3, 111.3 acres, you say you own an undivided 1/4 of 1/2 mineral acres of 111.3. I think that you mean an undivided 1/4 of 1/2 mineral interest in 111.3 acres. This is the same as 1/8 of 111.3 acres, or 13.9125 net mineral acres.

We need to know how much of each tract is included in the 612 acre unit.

Mr. Sinclair's formula is correct as far as it goes, but if your mineral interest is burdened with a non-participating royalty interest, or other burden or adjustment to royalty or production, then your revenue interest will be decreased.

If I made any bad assumptions, please correct me and I will try to work this through with you.

Best,

Buddy Cotten

#5

Mr. Cotton and Mr. Sinclair My “math” question was answered and now I only have multiple questions… Which I don’t think I should publicly post. Thank you for time and reassurance!

#6

But........we still don't know what the 'anode' is!

#7

Buddy Cotton, Sorry it has taken me so long to reply, especially concerning the “anode”… I own the most stupid smart phone, ever!! The phone put the word in, I didn’t Nintendo!!! Lol

Could you help regarding lease bonus and getting the NRI? The lease bonus should have been the total of mineral acres x $400 per acre, correct? To my knowledge all three tracts are in the 612 acre unit fully and our royalty rate is 25%. I’m a little confused because my ownership amount is different in the tracts… Thank you in advance

#8

Or anyone that can help, Mr.Sinclair, Go Fast… Thank you all

#9

Michelle your bonus is paid based on your net mineral acres, not the gross acres. So, if you own 1/4 of the minerals in a 100 acre tract, then you would receive 1/4 x 100= 25ac 25ac x $400/ac = $10,000.00

#10

Michelle,

I have a phone just like you. Just grin and bear it. Try this website for a laugh: http://www.damnyouautocorrect.com/

As to your acreage, you own 41.86725 net mineral acres. At $400 per net mineral acre, expect a bonus payment in the amount of $16,746.90.

If there is an unit formed in the gross size of 612 acres and you have 1/4 royalty on your lease AND all of your mineral acres are included in the unit (lots of "if's and and's"), then your share of production would be (41.86725/612) x .25, or a decimal interest of 0.0171026. There is the last assumption that the royalty portion of your mineral interests has not been completely or partially conveyed prior to your acquisition.

Cordially,

Buddy Cotten

Michelle Johnston said:
Buddy Cotton,
Sorry it has taken me so long to reply, especially concerning the "anode".............
I own the most stupid smart phone, ever!! The phone put the word in, I didn't Nintendo!!! Lol

Could you help regarding lease bonus and getting the NRI? The lease bonus should have been the total of mineral acres x $400 per acre, correct?
To my knowledge all three tracts are in the 612 acre unit fully and our royalty rate is 25%.
I'm a little confused because my ownership amount is different in the tracts......
Thank you in advance
#11