Natural Gas Royalty Calculator

Unless the entirety of a Production Unit is made up of your acreage, the "footprint" of a Production Unit is comprised of tracts of land that have been combined (or pooled) in order to create a large enough Unit to meet the state's regulatory requirements. Thus, the number required here for calculation purposes is the physical number of acres that you own which have been contributed (or pooled) into the entire footprint of the Unit.

Each state's regulatory body (which governs oil and gas operations) has rules establishing minimum and maximum Unit sizes. While there are some general guidelines, all Units are not the same size. Specific influences include: whether the well is classified as an oil or gas well, whether wells are vertical or horizontal, whether the acreage covers differing reservoirs, etc. The Unit size is often stated on a sign at the well's location. It can also be found by researching the public record within the state's oil and gas regulatory agency.

Often individuals do not own 100% of the minerals associated with a tract of land. Given that oil and gas has been produced in America since about 1860, mineral sales and partial mineral sales are in fact fairly routine. Often a portion of the minerals have been sold in the past, and even more often minerals have been fragmented by undivided conveyance to multiple family members. Thus, in order to produce a valid and accurate calculation of your decimal interest, it is imperative that you input the percentage of your mineral interest.

A standard provision in oil and gas leases is the establishment of a royalty payment to the lessor. This is often stated as a fraction, and sometimes as a percentage. This is the portion of proceeds from production that the lessor is entitled to receive, generally on a monthly basis. This number should be readily apparent in your oil and gas lease. It is one of the major terms which is negotiated with mineral owners.

This is the price received for the commodity - oil, condensate, or natural gas.

This is the gross volume of product (oil, condensate, or natural gas) which is produced. This is generally accounted for on a monthly basis.