Free calculator
Bigger bonus or bigger royalty? Compare two or three lease offers
Your land
The same land for every offer. Then fill in each offer below.
For the county's lease figures and what new leases there sold.
Your share of the tract's mineral acres. Half the minerals under 20 acres is 10.
We start at 1,280. Use the size in the offer or a division order if you know it.
OFFERA
Paid once, when you sign.
As the offer writes it: 1/4, 3/16, 25% or 0.25.
How long the lease lasts if nothing is drilled.
- BONUS AT SIGNING
- $50,000(most up front)$5,000 × 10 net acres
- YOUR SHARE OF THE UNIT
- 0.0014648418.75% royalty × 10 ÷ 1,280 unit acres
- TERM
- 3 years.
OFFERB
Paid once, when you sign.
As the offer writes it: 1/4, 3/16, 25% or 0.25.
How long the lease lasts if nothing is drilled.
- BONUS AT SIGNING
- $40,000$4,000 × 10 net acres
- YOUR SHARE OF THE UNIT
- 0.00195313(highest royalty)25% royalty × 10 ÷ 1,280 unit acres
- TERM
- 3 years, plus 2 more if the company uses its option ($10,000, left out).
Have a third offer?
Option payments
Left out: we do not assume the company extends the lease. The company decides whether to use an option, so leaving it out is the cautious comparison.
A worked example. Put in the offers you have.
The break-even
Offer A pays $10,000 more up front, but offer B pays you more once the wells in the unit sell over $20.5 million of oil and gas in all.
That is about 270,000 barrels of oil at $75.87, the average WTI price of the last 12 months (through August 2026).
Offer B catches up at $20.5 million of sales.
THE WORKING
- Bonus, offer A$5,000 × 10 net acres
- $50,000
- Bonus, offer B$4,000 × 10 net acres
- $40,000
- Bonus difference, B minus AOffer A pays more up front
- −$10,000
- Your share, offer A
- 0.00146484
- Your share, offer B
- 0.00195313
- Share difference, B minus A
- +0.00048828
- Break-even gross sales$10,000 ÷ 0.00048828
- $20,480,000
- Average WTI oil price, last 12 monthsThrough August 2026
- $75.87
- The break-even in barrels of oilBreak-even ÷ average price
- 269,938 bbl
What this comparison assumes
- Both offers cover the same land in the same unit, so the same wells and the same sales.
- A dollar of royalty in ten years counts the same as a dollar of bonus today.
- Royalty is figured on gross sales, before severance tax and any costs the lease lets the company take out.
- Option payments are left out: we do not assume the company extends the lease.
- The first term is shown but not used. It does not tell us when, or whether, a well is drilled.
- Your net acres do not move the break-even. The unit’s size does: a unit twice as big doubles it.
The county’s new leases
Choose the county of the land above to see what new leases there sold in their first three years. It is an estimate about the county, not about your land.
Next step
Once the royalty checks start, check them.
A stub shows the numbers, not whether they match the state’s. Upload a statement and we compare each month with the Railroad Commission record.
After that, the Owner plan ($149 a year) re-checks every month when new state data lands and alerts you about your leases.
How the break-even works
A lease offer pays you two ways. The bonus is paid once, when you sign: bonus per acre times your net mineral acres. The royalty is your share of every dollar of oil and gas the unit’s wells sell. That share is your decimal interest: the royalty fraction times your net acres, divided by the acres in the unit.
When one offer has the bigger bonus and the other the bigger royalty, the higher royalty catches up once the wells have sold enough. That amount is the break-even.
The formula
- Bonus
- bonus per acre × your net acres
- Your share
- royalty × your net acres ÷ unit acres
- Break-even sales
- difference in bonus ÷ difference in share
- In barrels
- break-even ÷ average WTI price of the last 12 months
Sales here are gross: before taxes and any costs, and with no discounting. The barrels are an oil equivalent; real wells sell gas as well.
A worked example
You own 10 net acres in a 1,280-acre unit. Offer A is $5,000 an acre with a 3/16 royalty. Offer B is $4,000 an acre with a 1/4 royalty. Offer A pays $10,000 more up front. Your share is 0.00146484 under A and 0.00195313 under B, a difference of 0.00048828. So B catches up once the unit sells $10,000 ÷ 0.00048828 = $20,480,000 of oil and gas.
What the county estimate is, and is not
When you choose the county, we show what new leases there sold in their first 12, 24 and 36 months of production: the lower quarter, the median and the upper quarter. That tells you whether a break-even of, say, $20 million is a lot or a little for that county. It is about leases in the county, not your land, and it does not say when, or whether, a well will be drilled.
What to look at next
The bonus and royalty are only part of an offer. How the lease treats costs, what land it releases after the first term and whether the company can extend it matter as much. Our lease scan quotes the sentence of the lease behind each of those, and the county lease pages show what State leases paid.
Questions owners ask
Common questions
Short answers. Sources are at the end of the page.
Is a bigger bonus or a bigger royalty better?
It depends on how much the wells in the unit sell. The bonus is paid once, when you sign. The royalty is paid on every month of production for as long as the lease lasts. The break-even is the amount of sales at which the extra royalty has paid back the smaller bonus. Below it the bigger bonus pays more; above it the bigger royalty does.
What does the break-even depend on?
The difference in bonus per acre, the difference in royalty and the size of the unit. Your net acres do not change it, because both the bonus and the royalty grow with them. A unit twice as big doubles the break-even.
Why do you start at 1,280 acres for the unit?
Your share of production is your royalty times your net acres divided by the acres in the unit, so the comparison needs a unit size. We start at 1,280 acres. If the offer, its pooling clause or a division order gives the unit size, use that instead.
Should I count the option payment?
An option lets the company extend the lease for more years by paying again. The company decides whether to use it, so we leave option payments out unless you choose to count them. If you count them, the comparison assumes the company extends the lease and pays.
Does the county estimate tell me what my land will produce?
No. It shows what leases in the county that started producing in the last six years sold in their first 12, 24 and 36 months. It is a way to see whether a break-even is a small or a large amount for that county. It says nothing about whether or when a well is drilled on your land.
What does this leave out?
Taxes, any costs the lease lets the company take out of the royalty, and the time value of money. It also leaves out the clauses that decide what you are actually paid, such as how costs are treated and what land is released after the first term. Scan the lease for those.
Free check
Rather have us check the statement?
Upload it. We compare every month with the Railroad Commission record and give you the questions to ask.