I wanted to try and calculate what the royalties per acre would be from the average Utica well over the life of the well for a person that had a 15% royalty %. I would assume the well has about 640 acres in the unit & has 3 or 4 laterals say 8000 feet long. If it makes any difference I was going to assume the well was drilled by Gulfport in western Belmont County.
I was going to go to the Shalecast website and use a well right beside me to do the calculations but the site is gone.
I was told by one industry employee that I should expect about $300/acre/well/month.
1 well with 10 acres in productive unit: 300 X 10 X 1 =. $3000 per month. This was about four years ago.
7 wells with 80 acres in productive unit: 300 X 80 X 7 = $168,000 per month.
This is is what I was told to expect. Now this could be wrong but, again, this is what I was told.
Thanks Thomas. Does anyone have anything concrete that they would be will to share. Have a well that recently went into production in Belmont, but have yet to see any royalties. Was curious what to expect as a normal royalty and how the current gas price might be affecting it. I am assuming that the price of gas is assumed higher for the above numbers.
So in reality now, how much are you getting?
We’re not in a productive unit...yet. Rumor has it maybe by the end of the year but I really don’t know what to expect. The figures I shared with you were what was given to me by our company rep as an example.
I figure I’d be fortunate if I saw 10% of what he claimed.
Im sure, if and when they do drill and if and when the well starts producing, it will outlive me.
Tjhe 640 acre per spacing unit is reasonable, but not 7 wells in the 640 acres. At least in Ohio, they usually have one well in a unit of about 640 acres.
You also need to multiply by 80/640 since you only own 80 acres of the 640 in the unit. You calculations also assume you own 100% of the minerals in the 80 acres.
You missed the 7. The formula given to me was (as I said above) $300 per acre per well per month.
300 X 80 X 7 = 168000.
I don't understand where the 7 comes from? I was asking about money taken in from one drilling unit. According to what you say, $300 per acre, I would think that is $300/acre in one drilling unit. Also, what do you think the royalty % is assumed to be for the person receiving the $300/acre, 15%, 18%, or 20%?
I assume these monthly totals are before all of the deductions are taken out of the check correct?
Only if your lease allows deductions ?
The formula is for 15%. The 7 is for SEVEN wells. The unit is what it is. The number of wells is dependent on the drilling plan of the company. You can have any number of wells in a unit, anywhere from 1 to seven or eight per pad.