Is there a way or Formula that you use to Calculate a price for a royalty interest in a lease. Is it like Acres x interest% x Barrels produced. Or is there something like that?
Unfortunately, there is no easy answer to that question as you framed it too generally. If you need the answer for the IRS and capital gains due to a sale, you may have several different answers. If you are splitting an estate, then yet another. If you are selling to a relative, you may have another answer. If you are getting offers to buy, each buyer would have their own formula. If you are leasing, yet another answer.
If you reframe the question specifically, you may get a better answer.
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Ok I am looking at it from the point of buying. As going to a current royalty owner and making an offer?
In the “old” days when the wells were vertical, a rule of thumb was the last four years of oil royalties and the last seven years of gas royalties. Vertical wells have a different decline curve than horizontal wells (in general).
If you are interested in an area with horizontal wells, that would be a different ballgame. They decline quite rapidly in the first few years and then level out at low levels potentially for decades. Some buyers buy on the Proved and Developed and Producing (PDP) reserves and some buyers but on the PDP and some multiple of the Proved and Undeveloped (PUD). One horizontal can hold a spacing unit, but it may not drain it completely. You need to understand if a particular area is oil prone or gas prone, one reservoir or many, when is it economic to drill, etc. You need to understand the pros and cons of being a working interest owner or just a royalty owner or a mineral owner (who may or may not own all the royalties). If you are new to this, suggest that you do a whole lot of research- talk to geologists, reservoir engineers and financial and attorney folks. This is not a business for the faint of heart or uninformed. Be prepared to lose every penny you invest and thrilled if you make some money.
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