(I’m not sure if I should put this in general or Eddy County NM section. It’s a general question, about mineral rights in Eddy county. If I should move it, let me know)
We own mineral rights on 3 tracts in Eddy county. There are currently 3 different operators paying us for mineral rights on those tracts. Each of these operators is paying is quite different RI interest decimals.
How does one go about determining the correct RI decimal to be used? Is it strange that each operator is paying a very different interest, or is that normal?
Much appreciated if anybody shed some light on this topic!
PS: Forgive me if I use the wrong terms, I don’t know the correct lingo.
It sounds like you own in 3 places. Each operated by a different operator. You are getting paid a different decimal by each. That sounds very normal.
You might own different amounts in each location. Each well is different (longer, shorter, whatever, dedicated to a different amount of acreage). So even if you own the same amount in each location, you are likely going to have different decimals in wells at each location.
End of the day someone (for example, you) would need to know what you own, then figure out what each of these wells are dedicated to, then figure out your percentage in each of the wells. That’s where the RI comes from. If you don’t know what you own I would probably start there, as nobody else here can help with that. Everything else is just pretty basic math.
Here are some random 100% fabricated up examples from Eddy county to maybe clarify what I am talking about. These assume leased acreage and not an ORRI but same concepts.
That’s not quite how it is, I didn’t explain it well. We own 3 tracts which are all next to each other. And there just happen to be 3 operators, but I believe each operator goes through all three tracts. Or they each go through at least one of the tracts. But it’s not one operator per tract (as far as I can tell). I don’t think any of the operators are actually ON any of our tracts, but they all go through at least one of them (although not 100% sure about that)
But my question is even more basic than that. I generally do not understand at all how that decimal point is calculated. So when the operator asks us to sign a division order with a decimal point on it, I don’t know how to verify if it is a fair falue or not.
But from your response, I see that to answer my question I need to come back with more specific information, and probably post in the Eddy county forum section.
Do you know if you own the same interest in each of the each 3 tracts?
Do you know if each of the 3 tracts are in the same sized unit?
Do you know if each of the 3 tracts are allocated the same?
Its quite common to own the same interest but due to the size of the units and allocation values, they can all differ. To answer your question, you could hire a landman at $500 a day to reasearch this if you really wanted to but 99% chance that they find the same thing as the operator thats paying you.
