National Association of Royalty Owners - NY

Calculating Royalties

When calculating how much royalties you will receive from natural gas production, you will need a few important pieces of information:

• Royalty rate - this amount will be listed in your natural gas lease. In New York State, the minimum royalty rate is 12.5%



• The size of the spacing unit the natural gas well will draw gas from - measured in acres. In New York State, the spacing unit sized is deterimined by the depth of the targeted formation - see the NYS DEC statewide spacing unit sizes and setbacks.



• The amount of acreage you own within the spacing unit - this amount will be communicated to you from the natural gas company or if you are unleased, from the NYS DEC on the Compulsory Integration Election Form.



• The wellhead price of natural gas - given in dollars per thousand cubic feet or Mcf



• The average production rate of the well in millions of cubic feet per or Mcf - if there is no actual well data available, you can use an estimate of production values from nearby well.
  

• Natural Gas Royalty Calculator - from Penn State Extension



• Natural Gas Royalty Estimator - from gelogy.com



• Natural Gas Weekly Update - from the U.S. Energy Information Administration - natural gas spot prices