CALCULATING BENEFICIAL INTERESTS Converted

This is a method of calculating working interests in a pooled unit or JOA that takes into account the royalty fraction negotiated in the individual lease. Typically, the calculation is simply the number of lease acres contributing to the unit divided by the total unit acres, regardless of the royalty in the lease. Bu using beneficial interests, we change the formula by creating "net revenue acres" so that the acres contributed and the acres in the unit are either increased or reduced based on the net revenue interest of each working interest owner.
Formula: # acres x WI NRI = net revenue acres
Net Revenue Acres/unit net revenue acres = Beneficial Interests
Example: A and B each own 80 acres in a 160 acre pooled unit. A has a 1/8 royalty and B has a 1/4 royalty. If we use the typical JOA formula, A's interest is 50% WI and B's interest is a 50% WI. 80/160 = 50% WI each
However, if we take into account the royalty rates,
A's interest is 80 x .875 NRI = 70 Net Revenue Acres and
B's interest is 80 X .75 NRI = 60 Net Revenue Acres.
Then, total 70 + 60 to get total unit acres and
A's interest is 70/130 = 54% WI Beneficial Interest
B's interest is 60/130 = 46% WI Beneficial Interest

[@Anonymike365]

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[@Datapassenger_prashant]

Hi mam, I want to learn from you.
But problem is I stay in India. I can share more if you share the details like email. Please
I already have experience of royalty analyst and qgis experience. So I would like to take things further in career. I'm currently working for a royalty acquisition company in Texas.

[@alycehogetraining]

Sure! Its [e-mail]. I look forward to hearing from you.