Great Plains 0505 4-9-1mh i just inherited this its producing my decimal 0.00019838 so what would my royaly amount average??
I know you would like to have an answer to that question, but it would not be a good idea for you to assume that there are average royalties. That well is a horizontal well and it will start out at its original rate and diminish in volume every month after that. Also, every month will have a different set of oil prices and gas prices. If you visualize a horizontal well’s volume decline it is shaped somewhat like a hockey stick on its side with the blade to the left and the handle to the right. The blade is the first few years of higher production and the stick can be many decades of low but predictable production. That is why you cannot get an “average” royalty. You would have to specify which year, what prices, what volumes, etc.
Your decimal amount comes from a formula. net mineral acres/actual spacing acres x royalty x % perforations in your section. That decimal amount will be applied to the revenue from the sale of oil and gas minus any taxes and other deductions that are allowed from the lease or pooling.
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