Royalty $ per acre

I know it varies greatly, but Anyone already receiving checks have any insight on per acre per % royalty #s? Leased with 20 %.



Thanks!

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Permalink Reply by RB on August 2, 2014 at 10:14am

How many wells are typically drilled in a 640 acre unit? 

Permalink Reply by The Hiker on August 2, 2014 at 10:18am

Typically three using 1000' spacing, but the o/g guys are moving towards 750' more and more.  Several units have 500' spacing and contain 4 wells.   Those in the examples I gave had three.

Permalink Reply by RB on August 2, 2014 at 10:39am

Thanks Hiker.  I think the well count is the variable I was missing in trying to get a handle on what amount one could expect on the average.

It is my estimation with all my observations on this site that one could expect, on average, about $300 per acre, per well.  I say that given the different royalties and processing deductions out there.  I couldn't see the ROI for the drillers quite frankly.  But with 3 wells producing, that is quite big difference. 3 wells at $300 per well  is about $900/month/acre.  4 is much better!! $1200!

On royalties, I actually thought despite being offered a higher percentage than the 12.5% minimum, I thought it had to NET out, after deductions, to 12.5% due to the law on that matter. I realize post signing that is probably not true.

Permalink Reply by robert c miller on August 5, 2014 at 11:57am

The number of folks in your unit is also a factor. 

Permalink Reply by James Foster on August 5, 2014 at 7:13pm

The number of acres you have in the unit divided by the total acres in the unit is the important number. The actual number of people in the unit is not relavant. If you have 40 acres in a 640 acre unit and 600 other people have 1 acre each or one other person has 600 acres you will still get 40/640 shares of the unit. Also your royalty rate say 18.5% will be applied to your share of the pie. And any deductions will be taken off.

Permalink Reply by David on August 6, 2014 at 10:04am

WOW Your math does not work. How do you get 18x20 ??

Permalink Reply by John on August 3, 2014 at 2:20pm

thanks for the info everyone! I am supposed to be getting my first royalty checks any day now. I will certainly let everyone know #s once I receive them. Best of luck to everyone!

Permalink Reply by evan on August 3, 2014 at 3:59pm

Are you in Carroll county John, if so are you with CHK. 

Permalink Reply by John on August 3, 2014 at 4:18pm

yes. Carroll county fox township with ches.

Permalink Reply by evan on August 3, 2014 at 4:41pm

Good luck. I'm with CHK Also in Guernsey County. Their supposed to be hooking up to the pipeline real soon.  Anxious to see things happening

Permalink Reply by Jeffrey Beunier on August 3, 2014 at 8:52pm

Also keep in mind, that the production rates decline and typically decline rapidly in the first year (upwards of 80%) due to the underlying nature of the reservoir.  So don't plan on receiving the same level of cash flow each month going forward - I've seen people spend the extra money thinking their first check was going to stay the same going forward only to be painfully surprised as the decline rate takes hold.

Permalink Reply by Mike h on August 5, 2014 at 12:16pm

The other point to consider is how many days in the month the well(s) were producing.

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