Ok, I was reading my lease, since they have drilled now. I was trying to figure out the best way to figure royalties, once we know what kind of production we have.
My understanding is: (net acres owned/640)assuming spacing is 640 x 3/16 (our lease %)x (bbl/day x oil price) x 30 = monthly amt?
My lease reads:
In consideration of the premises the said Lessee covenants and agrees:
1. To pay Lessor 3/16ths of the proceeds received for all oil (including but not limited to condensate and distillate) and 3/16ths of the proceeds received for all gas of whatsoever nature or kind (with all of its constituents) sold from the lease premises, but in no event more than 3/16ths of the actual amount received by Lessee, payments to be made monthly..
Does this mean they can subtract processing & other costs? This makes me think that they can subtract whatever they want 'but in no event more than 3/16ths of the actual amount received by Lessee'. Any ideas? It is a horizontal well, & there are no other producing wells in our unit.
A friend told us the big 'pots' already placed mean that the well is expected to make water. It hasn't been fracked yet but they are moving stuff into place.
Also, if they drill 4 wells from a location, how do you know which way they went first? Like, how do I know which one went under us?
Here's to hoping it makes more oil than water!