Freehold and Overriding Royalties

In this session, we will look at the variety of royalty interest structures such as Freehold Lessor Royalties and various types of Overriding Royalties including sliding scale, net profit , net carried and production volume royalties.  Oil and gas royalty products will be reviewed including the different royalty treatment for condensate versus plant products and how these products are defined in leases and contracts.  Deductions for facility usage costs will be discussed including an in depth look at deduction methodologies encountered in Industry today and focusing on how the royalty deduction language has evolved over the course of Industry’s historical leasing and farmout activity.  The use and application of Crown equivalent deduction wording and the consequences, how gas processing deductions are applied to other plant products, and the meaning of royalty determination points will also be discussed.

Speaker: Kathy Luther & Jennifer Martin