Mineral & Royalty Concepts
The vocabulary of mineral and royalty ownership, defined plainly — and, more usefully, with the money consequence attached to each term.
Net Mineral Acre (NMA)
One net mineral acre is one acre of 100% mineral ownership. Multiply the gross acres of a tract by your undivided fractional interest to get your net mineral acres.
Net Royalty Acre (NRA)
A net royalty acre is one net mineral acre standardized to a 1/8 (12.5%) royalty. It lets buyers compare interests leased at different royalty rates on equal footing.
Royalty Decimal
Your royalty decimal is the share of a well's production revenue paid to you, expressed as a decimal like 0.00234567. It combines your net acreage in the unit, the unit size, and your royalty rate.
Royalty Interest vs. Mineral Interest
A mineral interest is ownership in the minerals and may include the rights to lease, receive a bonus, and collect royalty. A royalty interest generally provides only a share of production revenue, without the executive right to lease or a right to lease bonuses.
Division Order
A division order is the form an operator sends asking you to verify your identity, property description, and royalty decimal so payments can begin. Signing it does not convey your minerals.
Suspense (Suspended Royalties)
Suspense is an account where an operator holds royalties it owes but cannot pay, usually because of a title problem, a death, a bad address, or a pooling dispute. The funds accrue and are released once the obstacle is cleared.
Non-Participating Royalty Interest (NPRI)
A non-participating royalty interest is a carved-out right to a share of production revenue with no executive rights: the holder cannot lease, receives no bonus, and does not pay drilling costs.
Overriding Royalty Interest (ORRI)
An overriding royalty interest is a share of production carved out of a working interest under an existing oil and gas lease. Unlike a mineral or royalty interest, it generally terminates when that lease terminates.
Pooling
Pooling combines separately owned tracts into a single drilling unit so one well can be drilled and each owner is paid a proportionate share of the unit's production.
Forced Pooling (Compulsory Pooling & Integration)
Forced pooling is a state proceeding that includes an owner's acreage in a drilling unit without that owner's agreement, setting the terms — royalty, participation, or a cost-recovery penalty — by order.
Dormant Mineral Act
A dormant mineral act is a state statute that terminates or reunites severed mineral rights with the surface estate when the mineral owner has taken no qualifying action for a statutory period, commonly twenty years.