Introduction to Minerals Overview n Introduction to minerals ownership Surface versus mineral ownership Minerals leasing n Working interest versus minerals ownership Cost / margin comparison Comparison of various classes of minerals…
Surface vs. Mineral Ownership n Surface Ownership Surface owners can sell, transfer, or develop the land within the guidelines established by the governing jurisdiction Surface owners may or may not own legal rights to the minerals…
Mineral Leasing Process Illustrative Drilling Units Within a Township n Linda is the owner of 100% of the minerals in the southeast quarter (SE/4) totaling 160 net mineral acres n Leases to E&P operator E&PCo for a primary term of…
Working Interest vs. Minerals Illustrative Cost and Margin per Barrel Illustrative Cash Margin per Barrel (/BOE) Working Interest The Royalty Barrel Operator Barrel Royalty Barrel Advantage Illustrative Revenue: Providing the…
Comparison of Various Types of Mineral and Royalty Interests Nonparticipating Royalty Overriding Royalty Minerals Interests Working Interest Interest (NPRI) Interest (ORRI) n Perpetual right to develop n Royalty interests that are n…
Mineral and Royalty Life Cycle Revenue to Minerals Owner Acreage Production Working Developed Revenue Interest A portion of production revenue Unleased Minerals Post-royalty E&P company is earned by Minerals Leased production…
Overriding Royalty Interest (ORRI) Life Cycle Revenue to Minerals Owner Revenue to ORRI Owner Acreage Production Working Developed Revenue Interest A portion of Unleased Minerals production revenue Post-royalty and is earned…
Minerals Acquisition Process 1 A B C Whom are Direct with Selling Marketed Transactions Minerals Sourced Brokers Mineral Owners & A&D Shops From 2 A B C Through Which Divestitures by Direct Outreach to Channels are Mineral…
Minerals Terminology Net Royalty Acres Net Mineral 100% Royalty Gross DSU Acres (standardized Acres Acres to 1/8th royalty) The net mineral The implied acreage acres owned by a Total acres within The acreage owned owned…
Key Concepts for Evaluating Minerals Businesses Key Terms Key Metrics 1 n DSUs (Drilling and Spacing Units) n Gross DSU acreage Acreage / n Net mineral acres n DUCs (Drilled Uncompleted) Development n 100% royalty acres n Spuds n…