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Oil/Gas/Decminal interest


QUESTION: I received a division order for a small interest in Williston ND. My lease states section 2: s2ne (80) and section 11:ne (160)240 gross mineral acres / 0.976744 net mineral acres with a 3/16 royalty. The division or gives us 0.000047700 RI. This seems very low. Can you explain the RI. I thought the RI was
.976744/240=0.0040698  .1875*0.0040698= .0007630875 and not what is in the division order

ANSWER: You are correct that it seems low.  Your question has some vague and ambiguous language if you own 240 acres and that equates to .976744 net mineral acres.  Are both properties part of the same lease?  What is the size of the spacing unit for the lease?

Let's just use an example, rather than the information provided by your lease.  Assume that all of the mineral rights owners in the spacing unit divide the 3/16 royalty from the unit production.  If you own one-quarter of a section (160 acres) and the unit is a 640 acre unit, then you would be entitled to one-fourth of the 3/16 royalty from production on that unit, or in decimal terms, .046875.

(Acres owned/Acres in Unit) * Royalty Fraction = decimal interest

---------- FOLLOW-UP ----------

QUESTION: I found out the unit spacing is 1280 acres and both properties are on the same lease. I assume by this their RI is correct. Is there a site where we can find unit spacing as we have some other property. Thanks again Richard

No it is still off by a factor of about 1000:

(240/1280 acres) = .1875 of the entire unit times 3/16 RI = .03515625, not .000047700

You might try calling the North Dakota Industrial Commission.  I don't know if they have the spacing info on their web site or not.


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Mark Bonner


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


I have been an attorney for over 20 years.

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

Oklahoma Bar Journal; Oklahoma Association for Justice Advocate

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