What Oil Price is used when Paying Royalties?

General Mineral Rights Discussion
1

Trying to figure out what date (or days) prices are used when royalty checks are paid?

For example, for February, WTI prices ranged from ~$90 (beginning of the month) to ~$100 (end of the month). What price is used for calculate the royalty amount? Does each company have their own system perhaps based on their accounting close date or rolling average?

I Googled this but did not find anything that seemed to answer my question - maybe there is some terminology that I am not aware of.

Thanks in advance for any feedback/input.

Kate

2

Most often oil is sold under a contract based on the average price over the 30 day period from the 25th of one month through 25th of succeeding month, adjusted for several factor such as demand at processing facility.

3

Gotcha - thanks so much for your response.

4

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