Oil volumes decrease over time. So even if prices rise, the lower volume will keep royalties from rising commensurately with the price. Look at the production month, the volume and price and compare to prior months. You need to post the well name, API or lease number, state, county and operator so someone can help you with a question about a specific well. In my experience, large and small oil companies sign contracts as I described above, and not fixed price contracts.
1 Like
Wow! Thanks for all the info everyone! Still a little confused about this “hedge contracts” everyone is speaking of though. Truth be told, I don’t have copies of any of the leases; although I suppose I could get it from county records online. I will post a legal description or two shortly. Thanks again!
RR208- No need for you to understand “hedge contracts”. They have no effect on mineral owners royalty. They are nothing more than a loan given to an seller of oil by a party that wants to buy the oil. In short, I will provide you X amount of barrels of oil for X dollars per barrel. Has nothing to do with any specific well.
This topic was automatically closed after 90 days. New replies are no longer allowed.