Thanks Heigele for taking the time to post this explains it soooo clearly. Guess I need to research how many net mineral we actually have retained over the years. thanks again for the info. it was a great help! little fish
On Sep 27, 7:09 pm, Heigele <[EMAIL PROTECTED]> wrote: > The recent discussion of Gross/Net Mineral acres left me a little > bleary - perhaps the following will be of assistance. > > EXAMPLE - Accounting for Gross/Net Mineral Acres in North Dakota > > 1. In 1908, assume that ¼ Section (160 Acres) was homesteaded. > The > outcome of this was that the homesteader acquired title to 160 > Surface > Acres/160 Gross Mineral Acres/160 Net Mineral Acres [Call the > homesteader “Owner A”]. > > 2. In 1955, assume the same ¼ Section was sold with provision > that > Seller/“Owner A” will retain 50% mineral ownership. > > a. Buyer in this transaction [Call the buyer “Owner B”] would > have > acquired title to 160 Surface Acres/160 Gross Mineral Acres/80 Net > Mineral Acres. > b. Seller/“Owner A” would have retained title to 160 Gross > Mineral > Acres/80 Net Mineral Acres. > > 3. In 1960, assume “Owner A” dies leaving his interest to 4 > offspring. > Now each of the offspring acquire title to 160 Gross Mineral Acres/20 > Net Mineral acres [Call the offspring “Owners A1, A2, A3, A4”]. > > 4. In 2006, assume “EOG” comes to lease total Mineral Acres in > the > original ¼ Section (160 Acres). > > a. From “Owner B” they lease 160 Gross Mineral Acres/80 Net > Mineral > Acres. > b. From “Owner A1” they lease 160 Gross Mineral Acres/20 Net > Mineral > Acres. > c. From “Owner A2” they lease 160 Gross Mineral Acres/20 Net > Mineral > Acres. > d. From “Owner A3” they lease 160 Gross Mineral Acres/20 Net > Mineral > Acres. > e. From “Owner A4” they lease 160 Gross Mineral Acres/20 Net > Mineral > Acres. > 5. Think of “Net Mineral Acres” as expressing “Owned Mineral Acres” > which are titled to a person or an entity in a particular tract of > land. > > 6. Think of “Gross Mineral Acres” as expressing the “Total Mineral > Acres” in a particular tract of land. This will remain constant for a > given tract of land (whether as in this example 160 or in other > instances 320 or 640, etc.) > > 7. In 1908, following the homestead - Owner “A” had title to 160 Net > (Owned) Mineral Acres in a tract of land containing 160 Gross (Total) > Mineral Acres. > > a. Expressed as a ratio of Owned Mineral acres to total Mineral acres > this was 160:160 > b. Expressed as a fraction of Owned Mineral acres to total Mineral > acres this was 160/160 = 1/1 = 1 > c. Expressed as a percentage of Owned Mineral acres to total Mineral > acres this was 160/160= 1 (x 100%) = 100% > > 8. In 1955, following the change in ownership – Both Owner “A” and > Owner “B” had title to 80 Net (Owned) Mineral Acres in a tract of land > containing 160 Gross (Total) Mineral Acres. > > a. Expressed as a ratio of Owned Mineral acres to total Mineral acres > this was 80:160 > b. Expressed as a fraction of Owned Mineral acres to total Mineral > acres this was 80/160 = 1/2 > c. Expressed as a percentage of Owned Mineral acres to total Mineral > acres this was 80/160 = ½ = .5 (x 100%) = 50% > > 9. In 1960, following the death of Owner “A” – the interests of Owner > “B” remained what they had become in 1955. Owners “A1”, “A2”, “A3” & > “A4” now each had title to 20 Net (Owned) Mineral Acres in a tract of > land containing 160 Gross (Total) Mineral Acres. > > a. Expressed as a ratio of Owned Mineral acres to total Mineral acres > this was 20:160 > b. Expressed as a fraction of Owned Mineral acres to total Mineral > acres this was 20/160 = 1/8 > c. Expressed as a percentage of Owned Mineral acres to total Mineral > acres this was 20/160 = 1/8 = .125 (x 100%) = 12.5% > > 10. In 2006, notice that “EOG” Leased 100% of the 160 Net (Owned) > Mineral Acres - and no Mineral Acre owner was shortchanged - the sum > of percentages of shares owned being Owner “B” 50% + Owner “A1” 12.5% > + Owner “A2” 12.5% + Owner “A3” 12.5% + Owner “A4” 12.5% = 100% --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Bakken Shale Discussion" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/bakken-shale-discussion?hl=en -~----------~----~----~----~------~----~------~--~---
