It is quite common that mineral and royalty owners don’t know exactly how much interest they own and yet it’s one of the most important things they need to be aware of as a responsible interest owner.
Some of the most common terms used to describe the amount of mineral and royalty interest include: Net Royalty Acre (NRA), Net Mineral Acre (NMA), and Division of Interest (DOI), which is commonly referred to as Net Revenue Interest (NRI).
Knowing your NRA, NMA, and DOI information is important for several reasons including:
- Provides a clear understanding of the owner’s financial interest as it relates to their mineral and royalty interests.
- Facilitates decision-making regarding the management of their mineral assets (i.e. revenue potential, negotiations for the lease, or sales of their interests).
- Provides transparency in the calculation of payments and helps to avoid disputes with the Lessee or Operator, and/or other mineral and royalty owners.
- Clarifies the ownership and revenue sharing arrangement between multiple parties that have mineral and royalty interests in a tract of land and/or producing unit.
- Represents the actual amount of revenue from a producing well the owner will receive after the Operator deducts various taxes and expenses, and after accounting for any leased or sold mineral rights.
What Is A Mineral Acre?
Referred to as a Net Mineral Acre, or NMA, it is a representation of the net acreage owned by a mineral owner from under the gross acres of a particular parcel or tract of land.
For example: If the gross acres of a tract of land are 40 gross acres and you are stated to own half of the minerals in that particular tract of land, then your net mineral acres owned are equal to 20 net mineral acres.
What Is A Royalty Acre?
A Net Royalty Acre, or NRA, is similar but different to that of a Net Mineral Acre. A Net Royalty Acre is a net mineral acre that is subject to an oil, gas, and mineral lease with a certain royalty percentage granted and provided for within that lease. It becomes a NRA once a mineral interest has been leased, otherwise it remains a net mineral acre (NMA).
Net royalty acre is the most common term used today for mineral buyers so it is very important to know the difference between Net Mineral Acres and Net Royalty Acres.
Mineral Rights Royalty Calculator
How do I Calculate My Mineral and Royalty Interests? We have created six mineral and royalty calculators to help you calculate net mineral acres, net royalty acres, and division of interest.
6 Mineral And Royalty Calculators
The mineral and royalty calculators are designed so you can check your ownership backwards and forwards, which we suggest you do often because the decimals often change from well to well and tract to tract.
You can use these calculators in any order. Deciding which mineral and royalty calculator to use depends on the information you have or can find out. Some of this information might be a little harder to find and it could take some digging or you can reach out to us for help. We have also provided ToolTips to show where you can find some of the information needed.
Be aware that many of these calculations will not be applicable for interests being included or held by allocation wells. Calculations involving allocation wells require additional information and calculation.
You can access the calculator page here.
At Venergy Momentum, we are focused on educating our private clients and mineral and royalty owners everywhere. It’s highly recommended that you visit our website as we have tons of information in our blogs and on our FAQ page to educate you at any stage of mineral and royalty ownership.
Please schedule a complimentary consultation with us so we can discuss your situation in detail.
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