Oil and gas royalty calculator
Work out your net royalty decimal and what a producing well pays you. Enter your net mineral acres, the size of the drilling unit your tract sits in, your lease royalty rate, and recent production and price. The calculator returns the decimal a division order would show and the gross monthly and annual royalty. Everything stays in your browser, and nothing is sent or stored.
Quick answer: This calculator works out your net royalty decimal and what a producing well pays you. Enter your net mineral acres, the unit size, and your royalty rate, and it returns your decimal interest and an estimated monthly and annual payment at a price and volume you choose. It is an estimate, not a guarantee of future income.
The formula
A royalty is a share of production revenue, and the share is the net royalty decimal. The decimal is your net mineral acres divided by the drilling or spacing unit acres, multiplied by your lease royalty rate. The payment is that decimal times the volume produced times the price. In short: decimal equals net acres over unit acres times royalty rate, and the check equals decimal times volume times price.
What each input means
Net mineral acres are the acres you actually own, which is the gross tract acres times your fractional ownership in that tract. If you own a quarter of the minerals under 160 acres, you hold 40 net mineral acres.
Drilling or spacing unit acres are the size of the unit your tract is pooled into, often 640 acres for a section or 1280 for two. If the well sits on your tract alone, use your tract acres.
Lease royalty rate is the fraction your lease reserves to you, commonly one eighth, three sixteenths or a quarter. Enter it as a fraction such as 3/16 or as a percent such as 18.75%.
Gross versus your actual check
The figure here is gross, before deductions. Most states levy a severance or production tax, and many leases allow the operator to charge back post production costs such as gathering, processing, compression and transportation. Those reduce what lands in your account. The annual number assumes the current month repeats, but a well declines over time, so read it as a snapshot rather than a promise.
Common questions
How do you calculate an oil and gas royalty payment?
Multiply your net royalty decimal by the volume produced and the price received. The net royalty decimal is your net mineral acres divided by the drilling unit acres, multiplied by your lease royalty rate.
What is a royalty decimal or decimal interest?
It is the fraction of total production revenue you receive. A division order states it to eight decimal places. It equals your net mineral acres divided by the unit acres, times your lease royalty rate.
Does the calculator show my check before or after taxes?
Before. It shows the gross royalty. Your actual check is reduced by state severance or production tax and, depending on your lease, post production deductions such as gathering, processing and transportation.
What if my tract is not pooled into a unit?
If the well sits on your tract alone, use your tract acres as the unit acres. Your decimal is then simply your ownership fraction times the lease royalty rate.
Sources and method
This tool performs standard division order arithmetic on the numbers you enter. It contains no assumed prices, production rates or tax figures, so it never guesses your interest. For how mineral and royalty interests are valued and how a sale works, see what mineral rights are worth and selling oil and gas royalties. For the laws that govern your interest by state, see the Mineral Rights Laws by State reference.
General information only, not legal, tax or financial advice. Confirm your decimal against your division order, lease and run statements, or a qualified professional, before relying on it. Corrections go to offers@americanmineralregistry.com.