You are here:

# Oil/Gas/deciphering what my first royalty check amount may be

Question
I leased my moms land 3 yrs ago to Chesapeake and yet to get a check due to some name change forms I had to update.I recently contacted them and I now have the ball rolling.
they sent me a exhibit to division order and I am trying to see if I can figure out just how much I should receive using this order. here is what I have

owner number/property number/prop name/
description states 423.560 acres

State- .............TX
County ...........Tarrant
Company.........Chesapeake
zone1bponri.........    .00001712
type..........ROY
Status........ST

I signed on at 20% royalties annually. Is there a way I can see how much my first check would be using this info?

To verify the payment decimal of 0.00001712 RI that Chesapeake is crediting to you, I need the following information:

1. The amount of mineral interest you own in the land included in the lease you signed 3 years ago; and
2. The legal description of the land, stated in the oil and gas lease; and
3. The name of the well that the division order is for.

With this information, I can go to the Texas Railroad Commission website and look at the unit plat and figure out which unit tract your leased land is in, so I can see how many acres of your lease are included inside the 423.560 acres.  Once I know that, I can calculate what your interest should be:

Your mineral interest X 20% royalty rate X leased acres inside unit / 423.560 acres = 0.00001712 RI

If you will please write a follow-up information giving me the 3 pieces of information I need, I can verify for you whether or not the 0.00001712 RI is correct.

And, just so you will know, the way to read a decimal interest is like this:  You will be entitled to receive roughly \$17.12 for every \$1 million of production coming out of the well.  With an eight-decimal interest like this one, you move the decimal point to the right until it sits in front of the last 2 numbers.  Then read it like dollars and cents: 0.00001712 becomes 000017.12 or \$17.12 for every \$1 million.  (On a calculator, multiply 0.00001712 by 1,000,000 and you get \$17.12).

To know how much your first check will be, you would need to know how much Chesapeake received from the purchaser for the calendar months you will be paid.  You won't know that until you see the check detail that will be attached to the check when you get it.  Texas law allows up to 120 days from the first day of the month following the date of first production, for Chesapeake to pay you your first check, but only if your account holds \$100 or more.  The well will need to produce roughly \$6,000,000 before you will get your first check unless you asked Chesapeake in writing to pay you when your account reaches \$25.

Oil/Gas

Volunteer

#### Marsha Breazeale, M.Ed., CDOA, CPLTA

##### Expertise

All questions regarding division orders; ownership decimal calculations; title ownership and payer record changes (testate/intestate inheritance; deed; assignment; court order); oil and gas lease analysis for record-keeping and purposes of payment by operator or payer; pooling, horizontal wells, horizontal well allocation units; unclaimed property reporting; royalty owner relations questions. All questions concerning administration of surface land contracts and payment questions, such as for Surface Right-of-Way, Sub-Surface Right-of-Way, Easement, Surface Use Agreement. All questions regarding industry-standard and company-specific policies that affect land owners.

##### Experience

Sr. Staff Division Order Analyst. Certified Division Order Analyst (CDOA, National Association of Division Order Analysts) and Certified Lease Analyst (CPLTA, National Association of Professional Lease and Title Analysts) with 35 years of experience as a combination division order analyst and lease analyst in exploration and production in the oil and gas industry.

Organizations
National Assoc. of Division Order Analysts (NADOA), National Association of Division Order Analysts (NALTA), American Association of Professional Landmen (AAPL), American Society of Trainers and Developers (ASTD)

Publications
"How an Oil & Gas Exploration & Production Company Operates" and "Principles of Oil & Gas Lease Analysis: Standard Clauses", Oil Patch Press; Articles in NADOA Magazine; LandFocus EDU Professional Training Manuals

Education/Credentials
B.A.in Management from Our Lady of the Lake University in San Antonio; M.Ed. in Instructional Design from WGU Texas.

Past/Present Clients
Past 15 years: GeoSouthern Energy Corporation; Contango Oil Co./Crimson Exploration & Operating Inc.; Apache Corporation; BP America; Marathon Oil; Newfield Exploration