How to Use an Oil Royalty Calculator to Determine Your Mineral Rights Value

Whether you plan to sell your property or simply figure up the value that your land has, determining the value of the mineral rights in your land is not as easy as it might seem. Luckily, there is an easy way to determine the value of minerals in your ground, which can help boost the value of your home and property.

An oil royalty calculator is a special tool that you can use to tally up the value, and in this article, we will look up all the information you need to help you determine your value with this handy tool. Here is what you need to know.

What is an Oil Royalty Calculator?

An oil royalty calculator is simply a tool that takes various inputs to total up the revenue percentage that comes from having valuable oil on your land. In this case, it takes certain inputs like the size of the property and the size of the production to come up with the revenue that a person can earn based on the oil on their property.

How Does It Work?

This calculator works by using your various inputs to create a math equation. This equation is figured out for you based on the information to give you an estimated number. However, this tool is specifically used to calculate the total revenue based on the amount of oil in the ground.

The calculator does the math equation automatically, and because of this, many people have chosen to use it as a way to tally up the total value of the minerals in their soil.

Using It to Determine Mineral Rights Value

First, landowners will need to contact a geologist to get the various information required to complete the equation. The geologist can look at the soil, take multiple tests, and find the amounts of natural resources, like oil, present in the soil that can boost the worth of the land. Next, you can use the calculator to input the number of acres of land the minerals cover, and the amount of land owned by the individual or company. This calculation gives you the acre-foot of the minerals. Using this number, input the acre-foot value with the mass of the mineral to give you the total amount of the minerals that are present on the land. The recovery rate should be used next to figure out the rest.

Determining the true value of the minerals available to any buyer should be determined by multiplying the amount of present minerals by the recovery rate. Then multiply the weight of the material by the recovery rate to get the amount available for extraction. Using these given numbers, you can input on the calculator to find your estimated worth for your mineral rights on your land.

Conclusion

When you have minerals on your land, it can be difficult to determine what is available, how much it is worth, and whether or not that boost the value of the land. By using an oil royalty calculator, you can tally up various numbers to give you a good estimated value of the land you hold and how much those minerals may be worth.