Jordan Stoltzfus

Thomas D White

Of Nets and Grosses

The questions deals with the land-owner’s royalty interest in production from an oil and gas lease. Historically, this interest was 1/8 (12.5%) of the net production from a well or wells leased by the landowner. Note that the royalty is a net amount. This allows the producer to subtract production costs from the gross or total production before dividing the proceeds with the landowner.

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