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Royalty Clerk

Guide · 8 minute read

How to read a royalty check stub

In the state's July 2026 production data, 138,490 Texas leases reported oil or gas. Your operator sends a stub with every check. It is a small ledger: what was sold, at what price, your share, and what came out. This guide walks through each box, then gives you five checks you can do in ten minutes.

Checked against the sources listed at the end.

Watch this guide · 5 minutes

Transcript of “How to read a royalty check stub”

Introduction

Every royalty check comes with a stub: what was sold, at what price, your share, and what came out. Texas law says what it must show. Here is how to read it, and five checks you can run yourself.

Every box, left to right

Read a stub from left to right: who you are, what was sold, your share, then the money. At the top, the operator who pays you, and your owner number. Quote it whenever you call. Next, the lease. This stub also prints the Railroad Commission's lease number and the county. That number finds your lease in the state's own records. Then your decimal, your share of the lease. It should be the same on every line for the same lease, and match your division order. Each line starts with a month. That is the month the oil was sold, not the month you were paid. Then the volume. On this stub it is your share of the barrels. Some stubs show the whole lease, so read the heading. The price each barrel sold for. Deductions: here, a fee for processing the gas. Many stubs list the severance tax in a column of its own. And what the line paid you. One stub can hold many lines, and they add up to the check.

The month is the sale month

The month on each line is when the oil or gas was sold. A check dated in September usually pays for July. Unless your lease says otherwise, Texas law gives the payor until sixty days after the end of the sale month to pay for oil, and ninety days for gas. A month missing between two stubs, or a month paid twice, is the first thing to ask about.

The math on one line

Every line follows the same arithmetic. Say the lease sold ten thousand barrels, and your decimal is 0.00097656. Your share is nine point seven seven barrels. At seventy dollars a barrel, that is $683.59 before tax. Texas takes a severance tax of four point six percent of oil: $31.45. So this line pays $652.14. Gas works the same way, in thousand cubic feet, with a tax of seven and a half percent, and often with deductions.

Five checks in ten minutes

Now, five checks you can run in ten minutes. One: the decimal matches your division order, to the fifth digit. Two: the volume matches the state. Take the lease's oil sold from the Railroad Commission, times your decimal. Your stub should be within a few percent. Three: the price follows the market. The gap to the West Texas Intermediate average should stay steady from month to month. Four: the tax is at the state rate. Four point six percent of oil, seven and a half of gas. Five: the timing is legal. Sixty days for oil, ninety for gas.

Words you will see

A few abbreviations. BBL is a barrel of oil, forty-two gallons. MCF is a thousand cubic feet of gas. MMBTU is a million British thermal units, the unit gas is often priced in. NGL means natural gas liquids. Sev tax is the severance tax, withheld and paid to the state for you. And the stub says which interest you own: a royalty, an overriding royalty, or a working interest.

When to ask, and how

When something does not add up, write to the owner relations office on the stub. Quote your owner number, and ask one thing at a time. Please send me the run tickets or the sales volume you used for the July 2026 oil sales on this lease, and the price index for that month. Send it by certified mail. The payor then has thirty days to answer, the same way. And keep every stub. A mistake usually shows up as a pattern, and you can only see a pattern with the months side by side.

What to do next

Or try our free stub check. Upload a stub, and it compares every month with the state's records. The sources for this video are on screen.

The sample stub is a real Midland County lease with a made-up owner. The worked example uses made-up numbers.

Your lease, from the state’s record

See what your stub should show

Pick your lease. We show what the operator told the state it sold each month, so you can set the volume lines of your stub beside it.

Your lease

Type the lease name as your stub prints it, or the state's number.

This is what operators report to the Railroad Commission of Texas for the whole lease. It is not a record of what you were paid, and it is not legal or tax advice.

What a stub is

An operator runs the wells, sells the oil and gas, and pays each owner a share. The stub, sometimes called a check detail or revenue statement, is the operator’s record of that payment. It is usually attached to the check or sent as a PDF when you are paid by direct deposit.

One stub can hold many lines: one for each lease, each product and each month. If you own in several wells, or the operator is catching up on an earlier month, the total on the check is the sum of all the lines. The lines are where the answers are.

Every box, explained

Operators format stubs differently, but they print the same eleven facts. The example below is made up. Read it from left to right: who you are, what was sold, your share, then the money.

One line of a statement, box by box

Example Energy Operating LLC

Check date 2026-09-25 · Check 118204

  1. Owner number

    0044817

    Your account number with this operator. Quote it in every letter.

  2. Property

    INTERSTATE 8-32 C

    The lease the money comes from. Look for the Railroad Commission lease number too.

  3. Sale month

    Jul 2026

    The month the oil or gas was sold, not the month you were paid. Payment follows one to three months later.

  4. Product

    Oil

    Oil, gas, or liquids from the gas plant. Each has its own line.

  5. Decimal

    0.00097656

    Your share of the whole lease. This number multiplies everything.

  6. Volume

    13.20 bbl

    Your barrels or mcf. Some operators print the whole lease's volume instead, then apply your decimal in the next columns.

  7. Price

    $79.36

    Dollars per barrel or per mcf. Compare it with WTI or Henry Hub for the month.

  8. Gross

    $1,047.55

    Volume times price. Your share of the sale before anything comes out.

  9. Taxes

    $48.19

    Severance tax: 4.6 percent of oil, 7.5 percent of gas in Texas.

  10. Deductions

    $0.00

    Costs taken out of the sale price: gathering, compression, processing. Common on gas, unusual on oil.

  11. Net

    $999.36

    What was paid for this line. The lines add up to the check.

Made-up figures. Your stub will order these differently, and some operators print fewer of them.

Three of these are worth a closer look, because most mistakes hide in them.

The sale month (3) is when the product was sold, not when you were paid. A check dated in September usually pays for July. If you see a month twice, or a month missing between two stubs, that is the first thing to ask about.

The decimal (5) should be the same on every line for the same lease, and should match your division order, the paper you signed when you first started receiving payments. Our guide to decimal interest shows how to rebuild it.

The volume (6) is either your share or the whole lease’s. Look at the column heading. If it is a tiny fraction of what the lease reports, it is your share. If it matches the lease total, the operator applies your decimal further along.

The math, with an example

Every line follows the same arithmetic. Take an oil line for a lease that sold 10,000 barrels in the month:

Oil, one month

Lease sales for the month10,000 bbl

Your decimal0.00097656

Your barrels: 10,000 × 0.000976569.77 bbl

Price paid$70.00 per bbl

Gross: 9.7656 × $70.00$683.59

Severance tax, 4.6 percent of oil−$31.44

Net, what this line pays$652.15

Gas works the same way with thousand cubic feet (mcf) and a price per mcf, and a tax of 7.5 percent. Gas lines often also carry deductions, and there may be a second gas line for the liquids the plant pulls out. Try your own numbers in the royalty calculator.

Five checks in ten minutes

  1. The decimal matches your division order. Find the division order or the deed and lease you received. If the two numbers differ in the fifth digit, ask why.
  2. The volume matches the state record. Find your lease in the Railroad Commission’s Production Data Query, or look it up here. Multiply the month’s oil sold by your decimal. Your stub should be within a few percent.
  3. The price follows the market. Compare the oil price with the WTI monthly average. The gap can be a few dollars and should stay steady from month to month. A gap that suddenly widens is a question.
  4. The tax is at the state rate. In Texas that is 4.6 percent of oil and 7.5 percent of gas. Use the severance tax check if the amount looks high.
  5. The timing is legal. Oil is due 60 days after the end of the sale month and gas 90 days, in Texas. See late payment interest.
What each check compares

  1. Decimal

    Your stub: The decimal column

    Compare with: Your division order

    Decimal calculator

  2. Volume

    Your stub: Barrels or mcf

    Compare with: The lease's sales in the state record, times your decimal

    Lease lookup

  3. Price

    Your stub: Dollars per barrel or mcf

    Compare with: EIA monthly WTI or Henry Hub

    Oil price check

  4. Tax

    Your stub: The tax column over the gross

    Compare with: 4.6 percent of oil, 7.5 percent of gas

    Severance tax check

  5. Timing

    Your stub: Check date and sale month

    Compare with: 60 days for oil, 90 for gas after month end

    Late interest

Abbreviations you will see

Common stub abbreviations
TermMeans
BBLBarrel of oil, 42 gallons
MCFThousand cubic feet of gas
MMBTUMillion British thermal units, the unit gas is often priced in
NGLNatural gas liquids such as ethane and propane, sold from the gas plant
RI, ORRI, WIRoyalty interest, overriding royalty interest, working interest. Your stub says which one you own
Sev taxSeverance tax withheld and paid to the state for you
Gathering, compression, processingCosts of moving and treating gas. See the guide on post-production deductions

When to ask, and how

Call or write the owner relations department named on the stub, quote your owner number, and ask one thing at a time. A specific question gets a specific answer. For example:

The question to ask

Please send me the run tickets or the sales volume you used for the July 2026 oil sales on this lease, and the price index for that month.

Ask in writing, and keep a copy!

If the answer does not arrive within a month, write it down and send it again. Keep every stub. A mistake usually shows up as a pattern across several months, and the only way to see a pattern is to have the months side by side.

FAQ

Questions people ask

What does the decimal on my royalty check stub mean?

It is your share of what the lease sells, written as a decimal. A decimal of 0.00097656 is 0.097656 percent, roughly one dollar in a thousand. Every dollar on the stub is that number times something else, so it should be the same on every line for the same lease.

How a decimal is built and checked

Why does my stub show a month that is not the month of the check?

The month on a stub is the month the oil or gas was sold. Unless your lease or another written agreement says otherwise, Texas payors have until 60 days after the end of that month for oil and 90 days for gas (Natural Resources Code section 91.402(a)), so a check dated in September usually pays for July.

Deadlines and late interest

How can I check the volume on my stub?

Find the lease in the Railroad Commission's Production Data Query, take the month's oil or gas sold, and multiply it by your decimal. The result should be within a few percent of the volume on your stub. The lookup on this site shows the same record by lease.

Look up a lease

What does Texas law require a royalty check stub to show?

Among other things: the lease or well name, any identification number, and the county and state; the month and year of the sales; the barrels of oil or the amount of gas sold; the price per barrel or per mcf; the state severance and other production taxes paid; any other deductions or adjustments; the net value of the sales; your interest as a decimal; your share before and after deductions; and an address and telephone number for questions (section 91.502).

Every stub code and term, with a tap-through stub

Sources