THIS IS FOR EDUCATIONAL PURPOSES ONLY.

 

The "spreadsheet" below simply demonstrates the relationships between all the variables used to determine royalty payments. 

 

Use it to see what changes in each variable might have on your bottom line. 

 

Enter multiple variables to see WHAT IF.....

 

Access the ROYALTY CALCULATOR HERE>>>                Royalty Calculator..xls 

                                                                                               (MS Excel 2003 Required to access this file)

 

Access the same Royalty Calculator, no need for Excel!                 Royalty Calculator

                                                                                                              No need to sign up!

 

Enjoy!

 

Ken Balliet, CED

 

 

NOTES:

How much of your land is in the production unit?

When an energy company applies for a drilling permit, they map out where they expect to recover the gas.

Landowners are then paid a royalty from the well on a pro-rated share.

For example, if the production unit is 400 acres and 100 acres is your land, you will receive a royaly based on 25% of the production, multiplied by your royalty rate.

 

 

Market price for Natural Gas:

How to determine the market price varies greatly by comany and on a lease by lease basis. Is it the market value at the well head, or at the entry point to the pipeline? Is it "net value" , subtracting marketing cost or is it gross value with no deductions. Many times landowners do not know the answers to this question. However, stay conservative on the value and you can see the effects of changes in royalties or production in payments.

Natural Gas Weekly seems to keep an eye on Prices: http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp

 

 

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