I am very new to understanding NMA calculations and need all the simplistic help I can find! How are NMA calculated on mineral acres with pumping units as opposed to acreage with only horizontal pipe? Billings County 25 T141 R99. Any help is greatly appreciated, including who to ask. Thanks!
Understanding you net mineral acres (NMA) comes from the complete description in your lease. The acres have nothing to do with the wells that are drilled on the property.
However, what you might be asking is how to calculate your decimal interest in any royalties. That does depend upon your net mineral acres, the royalty and the spacing of any reservoir and that needs a geographic description
For example, if your description on your deed or probate document says SW4 NE4 25-141N-99W, then you would read the description from right to left. Section 25 has 640 acres. The northeast quarter is 160 acres and the southwest quarter would be 40 acres. That would be your net mineral acres. If the deed said 1/4 undivided interest in SW4 NE4 25-141N-99W, then your would divide by 4 again and have 10 net mineral acres but not a particular 10 acres.
The next thing you need to know is your royalty. 1/6th is typical in ND (16.6666667%). 3/16ths is 18.75%, etc. Many companies make sales offers based upon net royalty acres (NRA). That is your net mineral acres x royalty x 8. Example: 40 acres at 3/16ths royalty equals 60 net royalty acres. (40*.1875*8) 40 acres at 1/6th royalty is 53.33333333 acres. Very important to know the difference.
Division Order decimal interest.
This requires your net mineral acres, your royalty and the spacing of the well. If you have a vertical well that is spaced at 80 acres, then you have to know if the spacing is a stand up unit, the 80 acres is the east or west half of a quarter section (N-S) or a laydown spacing which would be the north or south half of a quarter section. You also have to know if the well is actually in your acreage. In the above example, if you own SW4 NW4, then if the well is spaced in the SE4 of the section, you have no interest in the well. If the well is spaced in the NE4 but the well location is in the SE4 NE4, then you have to know if the 80 acres cuts across your acres. If you have the SW4 NE4, but the well is a standup on the east half, then you do not have any royalties. If the well is a laydown on the south half of NE4 , then you would have part of the well. 40/80 x .1875=.09375 for 3/16ths royalty.
If the well is a horizontal well, then the surface location may not be in your section at all. Sometimes the location is in a nearby section. In your case, you have the Repetowski 1-36H well. The surface location is in section 36. The permit says that the spacing unit is sections 25 & 36. That would mean a spacing of 1280 acres. In ND, the equation would be: net mineral acres/actual spacing acres x royalty. So if you had 40 acres at 3/16ths, then the simple decimal would be: 40/1280 x .1875=.00585938. Some companies have a different way of stating the amount on the Division order as they use a tract participation amount and those are a bit harder to figure out.
If you have the exact description of your acres, I can draw it on a map for you.If you have the Division order, then even better.
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Amazing~ Thank you very much for your in-depth explanation. I think you answered my question, the first part being that the wells/pumping units are essentially irrelevant to calculating NMA. Thank you very much for your time!
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