I want to sell my mineral rights and/or royalty interest. Someone told me if I sold my mineral rights, I would get them back in 10 years. Is this true?
You would get your mineral rights back in 10 years if there is no production. Production would cause the prescription to be interrupted and the minerals would not revert back to you until 10 years after the last date of such production.
I don't know anything about mineral rights, how do I know if I am receiving a fair offer for my mineral rights or royalty interest?
We examine the production history and current production trends in the area around your property. We will provide you with that information and let you make a determination if accepting the offer is in your interest.
I own mineral rights in the Haynesville Shale, how can I determine potential royalty income from my mineral rights? How much money in royalties will I receive for a well producing @ 500 mcfd?
An EASY WAY to estimate your potential royalty in a hypothetical (or actual) well is to use what's called your "decimal interest." It's a good thing to know, because your decimal interest is also used by the company to figure your royalty. Once you've got the decimal interest figured, simply multiply it by how much money the well brings in each month from sales to find your approximate monthly royalty.
Say you own 40 acres of minerals under a 640-acre drilling and spacing unit. The amount of acres you own proportionate to the whole unit is what determines your ownership percentage in the unit, and thus your "decimal interest."
Okay, to figure your decimal interest, take the number of acres you own in the unit (40, for example) and divide it by the number of acres in the unit (640.) This will give you what's called a "working interest" decimal, which is what you'd use if you were participating in the well (by paying your share of the costs associated with drilling it.) In this example it would be .0625. Likely though you won't be participating in the well so we'll continue on and multiply the working interest decimal of .0625 by the royalty on your lease (usually 3/16 or 1/8.) In this case we'll use 3/16, which is .1875 in decimal form. .0625 X .1875 is approximately .0117. This will be your "decimal interest." (NRI)
The decimal interest represents your "royalty interest" in the unit, proportionate to your ownership in the whole 640-acre unit.
As you can see, you can plug any number you like into this formula. Once you have your decimal interest, take the amount of money that the well makes in a month and multiply it by your decimal interest. The result would be about what you could expect in royalty.
A typical gas well might produce 15,000 MCF of gas per month. "MCF" is an acronym for "thousand-cubic-feet" so 15,000 MCF is really shorthand for 15-million cubic feet of gas.
Natural gas sells for about $7 per MCF these days in Louisiana. If a well produces 15,000 MCF in a month that would mean there was $105,000 in sales from the well that month. Multiply that figure by your decimal interest to arrive at your approximate royalty for the month. In our example, your 40 acres of minerals owned in a 640-acre unit at 3/16 royalty would come out to about $1,228.50 for that month. ($30.71 per acre, per month).
What are the boundaries of the Haynesville Shale in Northwest Louisiana? I own property in Northwest Louisiana and want to know if my property is affected by the Haynesville Shale Play.
The boundaries of the Haynesville Shale is still open for speculation. Petrohawk is focusing on the following; All of Desoto Parish, Southern ¾ of Caddo Parish, Northern ½ of Sabine Parish, Northwest Quarter of Natchitoches Parish, All of Red River Parish, Southwestern part of Webster Parish, and the Western 1/3 of Bienville (8w line). Exco Resources, Inc has all of Red River, Desoto, Caddo, Most of Webster, Extreme Western part of Bienville, Northwest Red River, Northwest Sabine, and none of Natchitoches. (As per (my interpretation of) a map outlining boundaries found in a Shreveport, LA newspaper, I will try to verify source and add map to the site). It is expected that the Center of this Shale play (Desoto, Southern Caddo) will be explored first and then start working outward to establish the “economically feasible production” boundaries.
What is the difference between Selling Mineral Rights vs. Royalty Interest
The main difference between mineral rights and royalty interest is the executive right. Mineral ownership allows the owner to negotiate and execute Oil, Gas & Mineral leases and receive the bonus money associated with the leases. Royalty interest entitles the owner to receive a portion of the production from a producing well. Royalty interest in Louisiana creates a servitude that runs with the property, and is subject to the 10 year prescriptive period for non-use that the mineral estate is also subject to.