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Oil/Gas/understanding lease royalty

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Question
Question when I read a line in the lease and it states. The royalties reserved by or payable to lessor are (a) on oil the equal one eight 1/8 of all oil produced and saved from land. Does this mean 1/8 of the oil or 1/8% of the oil. This is new to me I hope you will be able to help me. Thank you

Answer
James,

Believe it or not, the standard lease for provides the royalty owner 1/8 of the production.  Often, the royalty owner is able to negotiate a higher percentage, depending upon the perception of how valuable the lease is.  In percentage terms, 1/8 = 12.5%.

Mark Bonner

Oil/Gas

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Mark Bonner

Expertise

Interests include oil and gas leases, mineral deeds, royalty payments, interest on late royalty payments, post-production costs.

Experience

I have been an attorney for over 20 years.

Organizations
Norman & Edem, PLLC 127 N.W. 10th St. Oklahoma City, OK 73103 405-272-0200 (Tel.)

Publications
Oklahoma Bar Journal; Oklahoma Association for Justice Advocate

Education/Credentials
Highest Honors, OU College of Law, 1992 Earl Sneed Award for Oil & Gas

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