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# Oil/Gas/gross acres versus net mineral acres

Question
My sister, cousin and I just got leases agreements to sign pertaining to property in Harrison County, West Virginia.  The paperwork states that there are 50 gross acres and 0.29762 net mineral acres.

In the lease it also says "For all purposes of this leas, including determining the amount of delay rentals, royalties and shut-in royalties hereunder, said land shall be deemed to contain 50.00000 gross acres whether it actually contains more or less."

Our questions are these:  What are net mineral acres and how would that affect our royalties (12.5%)?  And if the property is more or less than 50 acres, why is that the number being used?

It looks like you have two questions here, so I'll take them one at a time.

"What are net mineral acres and how would that affect our royalties (12.5%)?"  Net mineral acres are the number of acres that expresses how much mineral rights you own in the whole piece of land.  If you owned 100% of the mineral rights in the 50 acres, the paperwork would say that you own 50 net acres in the 50 acre parcel of land.  Based on the net acres number you state in your question, you calculate your mineral rights percentage this way: 0.29762 net acres divided by 50 gross acres equals 0.59524% mineral rights in the 50 acres.  Is that correct?  If your records show you own a fraction instead of a percentage, take the top number of the fraction and divide it by the bottom number.  Then move the decimal point two places to the right and add a "%" sign on the end.  Do you get 0.59524% or something close to it?

"If the property is more or less than 50 acres, why is that the number being used?"  It is common practice to add the words "more or less" to the number of acres in a legal description.  One reason is because old surveys were done using old technology, and when the company gets ready to drill a well out there, they will have a new survey done of the parcel and it may measure out to be a little more, or a little less, so the lease says everyone agrees to treat the lease as containing 50 acres, whether it's a little more or little less by any new measurement.  Another reason it's used is in case the land is bordered by a creek or riverbed (even if it's dry).  Big rainstorms can cause small creeks and narrow rivers to change course a little bit, and that new course can change how much acreage is inside, or outside, the boundary of your 50-acre tract.  The lease is stating that all payments will be based on the tract containing 50 acres.

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