How to Read
Royalty Statement Example
(From a small well in west Texas)
Property (well information)
This might be the lease name, well API or ID number, unit number.
The month and year.
1118 = November 2018
1218 = December 2018
Overriding Royalty Interest (ORRI)
This is the price of oil ($/bbl), natural gas ($/mcf), and plant products ($/gallon).
Your ownership interest in the well.
The volume of oil, gas, or plant product produced during the month.
Each state has its own tax rules which often include severance, conservation, oil field cleanup, emergency fund, and other taxes.
Raw crude oil and natural gas are rarely marketable without processing. Common deductions include compression, dehydration, gathering, processing and treating.
Net Revenue for the Well
Net Revenue = (price * volume) – (taxes + deductions)
Owner’s Share Volume
Your decimal interest * well volume
Owner’s Gross Revenue
Owner volume * price
Owner’s Production Tax
Owner interest * tax
Well owner’s share of other deductions.
Your gross revenue minus your portion of the taxes and deductions.
This is the amount of revenue your wells have generated for all products (gas, oil, NGL, etc) for the month.