I see post's about acres, are they talking about gross or net? I have mineral rights that are 1640 gross with 75 net acres. Is this considered a large or small holding?
It's good to know both. What is really important is your "net acres", as that's what you actually own.
As for large or small you own 4.573 % (75/1640) if you own the same %. That's a minor interest. And that could even a smaller interest of a typical drilling section that is usually a 640 section, depending on what tracts you own in. But it beats zero.
Jon, it amuses me to hear the industry people refer to "small" interests. It wouldn't have to be a great well to produce $25,000 per acre, X 75 net acres we are talking about $1,875,000 but if you lease at 20% $375,000 and after taxes and deductions the operator may be able to deduct from your royalty you might get to pocket half of that, or 187,500 possibly spread out over 30 years or more, which I guess could be described as small. But wait! What if you have more than 1 well in that formation? What if you are over 3 or more produceable formations? What if, profit forbid, you didn't lease and give away 80% of of the money from your oil in the first place?
Thanks for the info. I have two leases that paid a decent bonus and one paid an enormous bonus so they must be good mineral rights. I wish this industry was not so secretive.
I hope you got a good royalty to go with the bonus and that lease terms don't eat up too much of it. I hope they pay your royalty when and how much they should. I also hope the government doesn't decide to tax us out of existence.