Estimate the gross royalty on a well from its production, your decimal interest and the price you are paid. Prices are seeded with the latest closes — WTI $81.55/bbl and Henry Hub $2.902/MMBtu as of 2026-08-27. A 40-acre interest in a 640-acre unit at a 3/16 royalty works out to a decimal of 0.01171875, worth roughly $4,094.72 a month on 4,000 bbl and 8,000 Mcf.
The share of the well you own — the number most people get wrong.
Formula: decimal = (your net acres ÷ unit acres) × royalty rate. If your division order already states a decimal, type it into the last box and it overrides the calculation.
Gross royalty at the wellhead, before tax and deductions.
Estimate only. This is not an audit of your statement and not financial or legal advice. Production from a new well declines steeply — often 60–70% in the first year — so annualising a recent month will overstate the next twelve. Check your division order for your actual decimal and your lease for which deductions are permitted.
A royalty cheque is the end of a long chain of arithmetic, and the statement usually shows only the last link. The operator sells the month's production, applies the sales price actually received, multiplies by your decimal interest, subtracts the taxes the state levies and whatever post-production costs the lease permits, and pays the remainder. Two owners with identical acreage in the same unit can receive noticeably different amounts if their leases were signed years apart with different royalty rates and different deduction language.
The decimal interest is where confusion usually starts. It is not the royalty rate. A 25% royalty sounds generous, but on 10 acres inside a 1,280-acre unit the decimal is (10 ÷ 1280) × 0.25 = 0.001953 — under a fifth of one percent of the well. Conversely a modest 12.5% royalty on a large tract can be worth far more. The unit size matters as much as the rate, and horizontal wells draining 1,280 or even 2,560-acre units have made units much larger than they were in the vertical era.
Price is the other common surprise. Headlines quote WTI at Cushing or Henry Hub in Louisiana; you are paid at the wellhead, net of the cost of getting the product to those points. That basis differential is why a statement can read $6 under the WTI you saw on the news, and why gas royalties in constrained basins have occasionally gone to zero or negative — the operator could not give the gas away.
Royalty = production × price × decimal interest. The decimal interest (often just called "your decimal") is the share of the well that belongs to you, and it is the part people get wrong. It is your acres divided by the total acres in the drilling unit, multiplied by the royalty rate in your lease. Own 40 acres in a 640-acre unit with a 18.75% (3/16) royalty and your decimal is (40 ÷ 640) × 0.1875 = 0.01171875 — so you receive about 1.17% of the gross revenue from that well.
Historically 12.5% (one-eighth) was the standard, and older leases still carry it. Competitive leasing in the productive shale basins pushed rates to 18.75% (3/16), 20% and 25% during the boom years. The rate is fixed by whatever your lease says — it does not change with the oil price, and it is not negotiable once the lease is signed.
This calculator gives GROSS royalty at the wellhead. Real cheques are reduced by several things it does not model: severance tax (roughly 4.6% to 7.5% depending on the state), ad valorem property tax, and — depending entirely on your lease language — post-production costs for gathering, compression, processing and transportation. On gas in particular, those deductions can be substantial. A lease with a "cost-free" or "gross proceeds" royalty clause blocks most of them; one without does not.
WTI is the benchmark price at Cushing, Oklahoma. You are paid the wellhead price, which is WTI minus a basis differential covering the cost of getting the barrel from your well to market, and adjusted for the quality of the crude. In the Permian that differential is usually small; in more remote basins it can be several dollars. Gas is worse — regional hubs like Waha have at times traded far below Henry Hub, and occasionally below zero. Enter your actual statement price for a realistic figure.
Monthly in most cases, but running one to three months behind the production month while the operator finalises volumes and sales. Many states allow an operator to hold payment until the balance reaches a minimum, commonly $100, so small interests may be paid quarterly or annually instead.