How are royalties figured...

I have heard from people in areas that are getting royalties already that some are getting $300-400 or more per acre for royalties. I know the leases my family has says we get a % of royalties...so I'm trying to figure out how this works out.

Let's say your royalties are 18% net. Do you get 18% off the $300-400 per acre people are getting or is the per acre amount already calculated with the %? I'm just trying to get a better understanding on how this all works.

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Permalink Reply by Chris on November 8, 2013 at 10:38am

(Mineral acres) x( Royalty)  / Unit size = gives you your Net royalty interest in the unit.

25 ac. x .18/640= 0.7% interest in the entire unit

Permalink Reply by Bill Barnaby on November 8, 2013 at 1:26pm

I believe they state money per acre to remain somewhat anonymous. This avoid people knowing how many acres you own (if your a billionaire or not). Also to avoid being tracked down... when they say $400 an acre, THEY get $400 an acre from my understandings. 

At least that is what I have assumed.

Permalink Reply by Ed Strawn on November 8, 2013 at 2:29pm

A few years ago a representative for Great Lakes Drilling and Exploration told me that at a 20% royalty their payout per acre was ranging between $2000-$8000.  

However, this may be hogwash

I am amazed that there isn't more transparency out there from the energy companies and property owners alike. 

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on November 8, 2013 at 6:18pm

"I am amazed that there isn't more transparency out there from the energy companies and property owners alike. "

There is transparency.  If you're dying to know what the royalties look like on your neighbor's property you can find the production data, look at the unit maps and find said neighbor's lease and make a calculation.  

Permalink Reply by Ed Strawn on November 23, 2013 at 1:48am

Dying to know  sounds  much too dramatic.

It should be our responsibility to find out what the royalties are and how they are figured.  When the energy company calculates your royalty, they should include that information less any deductions from your payment.

Communication builds trust and helps to deter fraud. Any American should understand that.  Cooperation creates good relationships.

Permalink Reply by Darlene Newton on November 8, 2013 at 11:27pm

Basically you agree with the Gas Co ours was Chesapeake!  What happens is you agree on a percentage making sure you ask every question before you sign. Being reassured by them that you do not need a lawyer ,you  sign it. with your Spouse or whom ever you have a witness. Now that you have signed this agreement and it does not matter if you have a lawyer from what I hear, they still take the percentage they PROMISED you. 

Now when you sign it does not mean a GD thing and the reason is :  Our Politicians have joined forces with the gas companies to not only steal the land and minerals from us , but to take our land!  I do  believe that is the rich and powerful taking over country! 

We The People either need to wake up and stop at this lying, deceiving , stealing that our Government and their Allies the rich and powerful Gas Companies do cause it ain't to hard to figure out what they are doing!!!!!!!!!!!!!!!!!!!! 

Do not work hard Americans because they will come and find a way to take the money YOU earned!  The American way is for the rich to keep getting rich and the poor keep them poor and slaves to the rich!!!!!!!!!!!!!!!!!

Basically, it does not matter what YOU sign what you agree to or even if you sign they will still come and  steal whatever it is they want meaning the Government and the Gas Companies do what ever they want.  It is pretty obvious when all you see is LIE LIE  LIE  and the big teacher at the time now is Barack Obama!!!!!!!!!!!!

I really hate what I for see in the future!

Darlene

Permalink Reply by JREwing on November 8, 2013 at 11:51pm
Somebody pee in your Cheerios this morning Darlene?
Permalink Reply by Darlene Newton on November 9, 2013 at 7:10am

I thought JR Ewing was dead?  Yes Chesapeake peeeeeeeed Royally in my bowl of Wheat Chex; do not eat Cheerios!  Darlene

Permalink Reply by Darlene Newton on November 9, 2013 at 7:10am

Plus people need to realize what they are getting into !!!!!!!!!!!!!!!!!!!!!!!!Darlene

Permalink Reply by evan on November 9, 2013 at 7:13am

Darlene I'm in a unit about to be drilled by chesapeake , is it as bad as they say.. hope not

Permalink Reply by Darlene Newton on November 9, 2013 at 7:27am

Yes it is not now but it will be,remember i told you! Darlene

Permalink Reply by Darlene Newton on November 9, 2013 at 7:22am

Well Mr Ewing I did my research and I see you are a big gas company man!  I would Crap in Chesapeakes bowl of cheerios any day and any low life gas company that promises one thing and steals it all back I would  So Mr Gas Man I would pee in your cheerios is you deceived hard working honest Americans!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Darlene

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