Income Investments in Oil and Gas.

FAQ - Savvy Royalties Oil & Gas Royalty Investments

 

1. What’s the difference between Mineral Interests (MI), Royalty Interests (RI), Overriding Royalty Interests (ORRI), and Working Interest (WI)?

2. What is used to evaluate the Oil & Gas Royalty Properties?

3. Why Do My Checks Vary Every Month?

4. Why Don't I Receive Royalty Checks Anymore?

5. How Do I Transfer My Interest to My Heirs Before I Die?

6. How Do I Calculate My Royalty Interest?

7. What are the Future Predictions for Oil & Gas Prices?

8. What if my Question is no answered here?

 

1. What’s the difference between Mineral Interests (MI), Royalty Interests (RI), Overriding Royalty Interests (ORRI), and Working Interest (WI)?

  MI RI ORRI WI
Generates Revenue from Well Production Y Y Y Y
Owns the Underground Minerals Y Y N N
Ownership Continues after Production Stops Y Y N N
Collects Upfront Bonus Payments Y N N N
Has Rights to Executive Leases Y Y N N
Pays to Operate or Drill the Well N N N Y
Participates in the Lease Operating Expenses N N N Y
Has Significant Tax Advantages N N N Y

(NPRI) Non-Participating Royalty Interests - Are Interest similar to ORRI's but typically not bound to a well or lease, they are typically bound to Minerals or Mineral Rights assigned by a land/mineral right owner conveying either a permanent royalty or temporary royalty off his or hers mineral rights and lands, typically NPRI do not have executive rights to bonuses but the NPRI owner is carried and bound by such leases that are executed by the true Mineral Rights Owner.

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2. What is used to evaluate the Properties that Companies Sell?

Evaluations are determined by our Petroleum Engineer:

1. Production History - (Decline Curves and Water Rates) of the Field and/or Leases

2. Operators Reputation - Some just get it done better than others.

3. Reservoir Formation - Some Reservoirs have longer production histories than others

4. Commodity Price Risk - Gas, Oil, or both - is it sour, treated, etc.

5. Future Production and Development

6. Interest Type - Royalty, Overriding Royalty, Mineral Rights/Interest, Non-Participating Royalty Interest, or Working Interest.

7. Historical Cash Flows and Averages for: 12 months, 6 months, and 3 months.

8. Tax Rates - Tax Rates for Purchase and Severance may be too high, low, or non-existent pending your state of where the interest is located, which affects a properties value and offer rate.

The information above allows us to calculate current reserves with a prediction of future reserves and cash flows. The objective is to offer fair market value while addressing risks and uncertainties that may be involved in future interests and commodities prices.

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3. Why Do My Checks Vary Every Month?

Because of variations of oil & gas production compounded with market averages, majority of oil & gas royalties are determined off the monthly commodity averages. Most operators are 60-90 days back meaning your current months check is typically for production two months back (gas) or one month back (oil), however some oil & gas companies operate 90 days back but is always based on production and commodity pricing. Additionally, productions do vary and change because of the declines in oil & gas wells. There is only so much gas that can be recovered from reserves on a monthly basis and over the lifetime of the well.

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4. Why Don't I Receive Royalty Checks Anymore?

1. A different company is responsible for paying you royalties and may be currently setting up your owner accounts. 2. The amounts you receive may not have accrued the minimal amount set forth by the Royalty Payor, for example Companies like Devon Energy Production Company, LP and Chesapeake Exploration, LP require that you must first have a minimum accrued amount of at least $100.00USD to receive a royalty check. 3. Your interest may be in suspense for legal reasons because you have not filed all appropriate paperwork with the Oil & Gas Company who is to pay you royalties, address change request, estate changes, or litigation. 4. The wells and/or field may not be producing gas or oil, please call the number on the last check stub you recieved. If you can't locate that number please feel free to contact us for further assistance and help.

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5. How Do I Transfer My Interest to My Heirs Before I Die?

Contact a competitant Board Certified Oil & Gas attorney or an Attorney that specializes in Wills, Trusts, Probate, and Deeds.

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6. How Do I Calculate My Royalty Interest?

Divide the Number of (Net) Mineral Acres You Own within the Unit by the Total Acres within the Unit, and multiply this by your royalty interest Listed in your Oil & Gas Lease.

Follow the Example Below:

Net Acre(s): 11 Acres

Unit Size: 640 acres

Royalty: 20% or 1/5th

11 ac/640ac X .20 = .0034375 Royalty Interest.

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7. What are the Future Predictions for Oil & Gas Prices?

Since experts can not agree on oil inventories of the volatility of the markets and what the future will have in store for Oil or Gas, we feel its a better approach to focus less on Future Prices and Forecasts and more on current trends.

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8. What if I have additional questions that were not answered here?

Please use the form on the right to get in touch with a representative today!

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NOTICE: This is not an offer to sell a security or a general solicitation; an offer to sell a security only may be made by a private placement memorandum offered to sophisticated and/or accredited investors where permitted by law. The purpose of this website is for general information and research purposes only. By submitting this request form you are confirming that we have not generally solicited you directly or indirectly whatsoever to invest in any oil and gas royalty project; you agree to be sent additional information and/or contacted by phone by a company offering oil and gas royalty projects. This website content is not meant to be considered financial, legal and/or investment advice, and any investment in royalty-based projects has degrees of risks that must be independently evaluated by you and/or your financial, legal or investment advisors.

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