TRP Minerals strives to empower every mineral owner with the best information so that they can make the best and most informed decision to create value from their minerals. Let us help you create lasting value today!
A mineral owner's percentage share of production, or the value derived from production, paid from a producing well.
Costs related to treating, processing, compressing, gathering and transporting gas from the wellhead to the point of sale.
A clause added to an oil and gas lease to limit holdings on non- producing lands or depths beyond the primary term of the lease.
The length of time defined in an oil and gas lease that dictates the amount of time the lease is in affect if commercial production has not been established.
A mineral owner's percentage share of production, or the value derived from production, paid from a producing well.
Royalty rates are formulaic in our calculation of value. We traditionally appraise a mineral acre as if the Royalty Rate is 12.5%. Industry calls this a Net Royalty Acre. Simply stated, if your Royalty Rate is 18.75% and you own 10 acres then we will adjust your Net Royalty Acre proportionately higher so that your higher royalty Rate receive a higher value.
NRI or Decimal Interest is the percentage operators pay you on your Royalty Check.
Your NRI is based on the allocation the State's regulatory commission approves based on Spacing and Unit Size. Every State has different relations regarding Spacing and Unitization. Our expert team is more than willing to help you understand the Spacing and Unit Size that your minerals are located.
The following examples are helpful formulas used in the oil and gas industry.
If you receive an offer for $5,000 per NMA with a royalty of 25%, you will be able to calculate your actual offer by following the example below.
If you receive an offer for $2,500 per NRA, the buyer is assuming that the royalty is 12.5%. You will be able to calculate your actual offer by following the example below.
We traditionally pay a lump sum of cash within 10 business days after you sign the purchase and sale agreement.
The costs related to treating, processing, compressing, gathering and transporting gas from the wellhead to the point of sale.
If a lease does not explicitly state that Post Production Cost will not be applied to a mineral owner, Operators will deduct their proportionate cost to treat, process, compress, and transport gas from your Royalty payment. In many cases, Operators create their own gas processing companies and charge higher than market rates to process the gas. By doing this, the operator is effectively reducing your Royalty Rate because they are recouping money through the deductions.
As mineral owners, we know that in many cases leases were already in place before we owned the minerals. As a result, we are subject to the provisions in the lease. The good news is that if you ever have the opportunity to lease your minerals, you can negotiate a "Cost Free Lease" that is not subject to Post Production Cost!
A mineral acre that is lease with no Post Production Cost is worth more than the same mineral that is leased with Post Production Cost.
We focus on areas that we know best in order to provide the highest level of expertise.
The Pugh Clause is a concept derived from Pooling. Although Pooling is a very complex concept based on State's established "Field Rules" relating to spacing, we can provide basic insight on the value of the Pugh Clause and why it has such great value.
If an Operator elects to pool mineral owners into a Production Unit, a notice will be sent to you from the State. The State will then hold multiple hearings to establish the Unit size based on the geology and reservoir conditions. If your mineral acres are Ultimately Pooled into a 640 ace unit, you would participated in the unit based on the approved allocation.
The problem exist if you own 100 net mineral acres and only 20 of your mineral acres are pooled, the operator would be able to maintain the lease on the other 80 as long as they are holding the lease through production (HBP- Held By Production). Essentially, your remaining 80 mineral acres is trapped and cannot be release after the Primary Term of the lease has expired.
If a Lease has a Pugh Clause, the remaining 80 mineral acres from the above example would be able to be re-leased. Re-leasing the acreage will generate additional Bonus Money and better lease terms.
Lease with Pugh Clauses inherently are more valuable that leases without Pugh Clauses.
We strive to help facilitate your decisions so that you are empowered with the best information and knowledge so that you can capture the highest value of your minerals.
The length of time defined in an oil and gas lease that dictates the amount of time the lease is in affect if commercial production has not been established.
Traditionally, operator will try to negotiate a lease with a Primary Term as long as possible. Understanding that nobody wants to tie up their acreage, Operators often negotiate an option to release the minerals after the primary term for a pre-negotiated cost per acre.
TRP would encourage all mineral owners that are thinking about leasing their minerals to negotiate a Continuous Drilling Provision.
Not all operators are the same.
Depending on who the current Lessee (Operator) is can effect the value of your minerals. It is very common to have two operators drilling and completing wells right next to each other and into the same productive reservoir and one of the operator's well performance is significantly better than the other.
Larger operators such as EOG and Marathon have access to larger capital budgets that traditionally allow them to with stand the normal fluctuation of oil and gas prices.
Leases that have desirable operators create higher values for minerals owners.
TRP Minerals strives to empower every mineral owner with the best information so that they can make the best and most informed decision to create value from their minerals. Let us help you create lasting value today!
A mineral owner's percentage share of production, or the value derived from production, paid from a producing well.
Costs related to treating, processing, compressing, gathering and transporting gas from the wellhead to the point of sale.
A clause added to an oil and gas lease to limit holdings on non- producing lands or depths beyond the primary term of the lease.
The length of time defined in an oil and gas lease that dictates the amount of time the lease is in affect if commercial production has not been established.
A mineral owner's percentage share of production, or the value derived from production, paid from a producing well.
Evaluating Royalty Rates
Royalty rates are formulaic in our calculation of value. We traditionally appraise a mineral acre as if the Royalty Rate is 12.5%. Industry calls this a Net Royalty Acre. Simply stated, if your Royalty Rate is 18.75% and you own 10 acres then we will adjust your Net Royalty Acre proportionately higher so that your higher royalty Rate receive a higher value.
NRI or Decimal Interest is the percentage operators pay you on your Royalty Check.
Your NRI is based on the allocation the State's regulatory commission approves based on Spacing and Unit Size. Every State has different relations regarding Spacing and Unitization. Our expert team is more than willing to help you understand the Spacing and Unit Size that your minerals are located.
The following examples are helpful formulas used in the oil and gas industry.
If you receive an offer for $5,000 per NMA with a royalty of 25%, you will be able to calculate your actual offer by following the example below.
If you receive an offer for $2,500 per NRA, the buyer is assuming that the royalty is 12.5%. You will be able to calculate your actual offer by following the example below.
We traditionally pay a lump sum of cash within 10 business days after you sign the purchase and sale agreement.
The costs related to treating, processing, compressing, gathering and transporting gas from the wellhead to the point of sale.
If a lease does not explicitly state that Post Production Cost will not be applied to a mineral owner, Operators will deduct their proportionate cost to treat, process, compress, and transport gas from your Royalty payment. In many cases, Operators create their own gas processing companies and charge higher than market rates to process the gas. By doing this, the operator is effectively reducing your Royalty Rate because they are recouping money through the deductions.
As mineral owners, we know that in many cases leases were already in place before we owned the minerals. As a result, we are subject to the provisions in the lease. The good news is that if you ever have the opportunity to lease your minerals, you can negotiate a "Cost Free Lease" that is not subject to Post Production Cost!
A mineral acre that is lease with no Post Production Cost is worth more than the same mineral that is leased with Post Production Cost.
We focus on areas that we know best in order to provide the highest level of expertise.
The Pugh Clause is a concept derived from Pooling. Although Pooling is a very complex concept based on State's established "Field Rules" relating to spacing, we can provide basic insight on the value of the Pugh Clause and why it has such great value.
If an Operator elects to pool mineral owners into a Production Unit, a notice will be sent to you from the State. The State will then hold multiple hearings to establish the Unit size based on the geology and reservoir conditions. If your mineral acres are Ultimately Pooled into a 640 ace unit, you would participated in the unit based on the approved allocation.
The problem exist if you own 100 net mineral acres and only 20 of your mineral acres are pooled, the operator would be able to maintain the lease on the other 80 as long as they are holding the lease through production (HBP- Held By Production). Essentially, your remaining 80 mineral acres is trapped and cannot be release after the Primary Term of the lease has expired.
If a Lease has a Pugh Clause, the remaining 80 mineral acres from the above example would be able to be re-leased. Re-leasing the acreage will generate additional Bonus Money and better lease terms.
Lease with Pugh Clauses inherently are more valuable that leases without Pugh Clauses.
We strive to help facilitate your decisions so that you are empowered with the best information and knowledge so that you can capture the highest value of your minerals.
The length of time defined in an oil and gas lease that dictates the amount of time the lease is in affect if commercial production has not been established.
Traditionally, operator will try to negotiate a lease with a Primary Term as long as possible. Understanding that nobody wants to tie up their acreage, Operators often negotiate an option to release the minerals after the primary term for a pre-negotiated cost per acre.
TRP would encourage all mineral owners that are thinking about leasing their minerals to negotiate a Continuous Drilling Provision.
Not all operators are the same.
Depending on who the current Lessee (Operator) is can effect the value of your minerals. It is very common to have two operators drilling and completing wells right next to each other and into the same productive reservoir and one of the operator's well performance is significantly better than the other.
Larger operators such as EOG and Marathon have access to larger capital budgets that traditionally allow them to with stand the normal fluctuation of oil and gas prices.
Leases that have desirable operators create higher values for minerals owners.
Your trusted source for mineral acquisitions.