What should I expect?

First of all, I want to thank this forum for the information it provides, especially to those of us that have no experience in this area. After getting some great responses to my initial questions, I know that I have to get back to reality. I own an undivided interest in 2.5 acres outside Orla, Tx. My cousins own the other 2.5 acres. If there are wells in our vicinity or one gets drilled on our section, what kind of royalties are we to expect? Since the acreage is so small, I'm thinking not much, but I don't fully understand how everything works. Any comments?

Tough to answer this question without more information, But, if you were in a 600 acre section and your royalty rate was 22%, your share of production (before costs) from your 2.5 acres would be 0.09%. In other words, on $1,000,000 in production you would receive approximatley $900 in royalties (without considering production costs). Don't take that cruise yet. Sorry

If you own 2.5 acres out of a 640 acre section at 25% royalty interest and oil is selling at $88/barrel, then your return from a well should be in the .08 to .09 cents per barrel range. On a 300 bls/day at .08/bl you should be looking at $24/day X 30 days = $720/month. Just gives a quick rule of thumb without having to recalculate everytime. Depends on your well's monthly production.