I belong to the NDIC website and am having trouble determining which numbers are used to determine my royalties. I was told originally if the ‘run’ number is up I will be paid more, but recently was told it is the ‘barrels’ number. Does anyone know the correct answer? I like to track them to determine if my check will go up or down, but I am not sure which number is representative of the royalties.
Although I used the term ‘barrels’ in my question, the term used on the NDIC website is ‘BBLS.’
Runs = tickets documenting how much oil is taken off the location by purchaser (i.e. sold). Measured through a LACT unit.
Production = estimate of how much oil was produced into the tank battery. Measure tank battery levels etc.
If all the measurement is infallible those two numbers should match over the life of the well.
If a well is a low producer, they may not sell any oil in a given month and some months they may sell several months worth of production. If you have a real big tank battery they may allow more oil to sit in tanks because of weather (truck issues) or pricing. But over the long haul it shouldn’t matter which one you look at.
But “Runs” should be what you are paid on.
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Thank you so much! Your reply is greatly appreciated and it is explained very well! Vicki