Decimal interest calculator

The formula

For a royalty owner, the decimal interest is the lease royalty times the share of the unit you own:

decimal = royalty × (net acres ÷ unit acres)

Net acres are the acres in the tract times your share of the minerals. If you own half of the minerals under 10 acres, you own 5 net acres. The unit is the pooled area the well produces for, and its size is on the pooling order or the operator’s division order.

A worked example

A 1/4 royalty on 5 net acres inside a 1,280-acre unit:

1/4 × 5 ÷ 1,280 = 0.25 × 0.00390625 = 0.0009765625

That is the decimal on the sample owner’s statements: 0.00097656. Every barrel the lease sells pays this owner about a thousandth of a barrel.

Override and working interests

An override (ORRI) is a share of production carved out of the working interest. Its decimal is the override fraction of 8/8ths times the same acreage share. A working interest owner also pays costs. The number that matches revenue on a statement is the net revenue interest (NRI): the working interest after the lease royalty and any overrides come off. This calculator shows both steps.

When your decimal does not match

• The royalty fraction on the division order is different from the lease. Look for a “proportionate reduction” clause.
• The unit acres are different. Pooled units are sometimes amended when wells are added.
• Your net acres changed because of a sale, an inheritance or a title correction.
• The operator used a tract factor from a different survey.

A gap under half a percent is rounding. Anything larger is a question for the operator’s owner relations desk. The guide what your decimal interest means lists the documents to ask for.