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# Oil/Gas/net profit

Question
What mathematical formula would you use to compute a 1/5 mineral owners' royalty? Is the following correct?
(1) 1/5=0.2.
(2)1.00 - 0.2 = 0.8 (used to compute overriding royalty).
(3) 0.2 x # of Mineral royalty owners'.
(4)Production - all Mineral Royalties

What mathematical formula would you use to compute 1/16 overriding royalty?
(1) 1/16=0.0625
(2) 0.8 x 0.625 = 0.05
(3) (Production - mineral owners royalties) x 0.05
(4) Production - mineral owners royalties - Taxes - Overriding Royalties

What mathematical formula would you use to compute a 1/8 working interest?

Lois
In your first example, the mineral owners royalty is 1/5. If you meant to ask what the mineral owners net decimal interest is in a unit with a 1/5 royalty, here is how you calculate that: take the mineral owners net acres and divide it by the number of unit acres that is formed for the well.  Then take the result of that and multiply it times the lease royalty. That gives you the net decimal interest in the unit well.
For example:  5 net acres divided by 640 unit acres = .0078125
.0078125 x .20 (1/5 =.20) = .-0.001561546 net decimal interest in unit
The second question you asks concerns an Overriding Royalty Int.
An Overriding Royalty Interest is a burden on the Leasehold. In other words if I own all the leases for the unit and after I pay the mineral owners their royalty I am left with .75 (75%) net revenue interest, and I assign a .02 Override to someone, my Net Revenue Int is reduced by the ORRI to .73 net revenue.
I hope this explains what you needed to know.
Thank you

Oil/Gas

Volunteer

#### Laura M. FitzGerald, CPL

##### Experience

I have over 34 years experience as an Independent Petroleum Landman. I became a Landman after working as a paralegal for Oil & Gas Attorneys for 8 years. My first 2 years were spent specializing in Well History and Research with the Louisiana Department of Conservation, then moving into clearing title defects and handling title curative for oil and gas properties for the next 6 years. Subsequent thereto, I handled title issues, buying oil and gas leases and settling surface damages. I also acquired acreage for drilling prospects in excess of 10,000 acres. I also became a mineral/royalty owner commencing in 2004 and have found that I can help many people when they have reached the point in their lives they feel converting their minerals or royalties into a cash asset benefits them.

Organizations
American Association for Professional Landmen, ArkLaTex Assoc. of Professional Landmen, and Dallas Association of Professional Landmen (DAPL), Certified by the Women's Business Enterprise National Council (WBENC)- South. This certification is one of the most widely recognized and respected certifications in the nation. This designation is reserved for only those women-led businesses that exemplify the characteristics of integrity and professionalism to which the WBENC adheres to so strictly.

Education/Credentials
Attended LSU, became a Certified Professional Landman in 1994; Notary Public with dual authority in multiple parishes in North Louisiana; Bilingual in English and Greek

Awards and Honors
Expert Oil & Gas Professional assisting attorneys representing landowners. Involved in 2 lawsuits and both suits were awarded to the landowner. Ilios Resources, Inc. has been awarded the Best of Shreveport Oil and Gas Mineral Buyer Award for 2016, 2015, 2014, 2013 and 2012.

Past/Present Clients
Consultant Landman for Texas Oil & Gas (TXO Production Corp.), Anadarko Petroleum, Comstock Resources,Independent Geologists, Pipeline ROW Clients, and Oil & Gas Attorneys. For the past 5 years my practice is primarily an advocacy for the landowner. I also assist royalty owners recover suspended payments or incorrect royalty payments, or sell their mineral or royalty interest.