Doing the math
Here's a simple example.
Let's say royalty rights are 18% of revenue, so we start by subtracting that from 100%, giving us 82%.
82% of revenue is the net revenue interest for this particular production unit. To get net revenue interest for each entity that owns a share of working interest, divide their working interest by 82%. So, if a producer holds the full working interest in the production unit, its net revenue interest would be 82%.
But if, say, you had a financial backer who owned a 10% working interest while you held the other 90%, then the math changes since you'd hold 90% of the 82% of production after royalty holders are paid. So you'd hold 90% x 82% = 73.8% of net revenue interest for that particular drilling unit.
A more complicated example:
If you own a working interest in only part of a larger drilling unit, say you hold 100% working interest in 100 acres of a 300 acre drilling unit:
In this example, using the same royalty interest of 18% as above, you'd hold a 33.3% working interest in the drilling unit, of which 82% is available after royalties. So 33.3% x 82% = 27.3% net revenue interest in the 300-acre drilling unit.
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