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Coffee Shop
Well crud! Thought I had sold the place.
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<blockquote data-quote="Earl Thigpen" data-source="post: 415735" data-attributes="member: 3999"><p>Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order.</p><p></p><p>This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it.</p><p></p><p>So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.</p><p></p><p>So, Lammie. How many acres are you selling?</p></blockquote><p></p>
[QUOTE="Earl Thigpen, post: 415735, member: 3999"] Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order. This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it. So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre. So, Lammie. How many acres are you selling? [/QUOTE]
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Coffee Shop
Well crud! Thought I had sold the place.
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