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From Kandi Roche

By Staff | Mar 18, 2009

Pricing: Mineral, gas, and oil land and royalty owners: Do you know how to calculate the product being removed from your ownership? Read the meters, track the trail of the pipeline removing your product.

Sample meter reading and calculation:

270,000 mfc (thousand cubic feet) per day

x 6 pounds of pressure product is being extracted (deleting the 0) i.e. 60 lbs of pressure would be 6

= 1,620,000 mcf the actual total amount of gas being extracted per day

x $14 per 1,000 cubic feet (or whatever the rate is this month) (1,620 mcf x $14 = $22,680 per day)

x 365 days per year $8,278,200.00 per year

x number of years (five years average contract)

= $41,391,000.00 gross income for one well.

And you accepted $5 for rent/lease.

Kandi Roche