How to Calculate Net Revenue Interest for Oil & Gas

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How to Calculate Net Revenue Interest for Oil & Gas
Original post by D. Laverne O'Neal of Demand Media

Net revenue interest is defined as a share of oil or gas production that is calculated after deducting any burdens from the working interest. For example, an oil well typically has a mineral rights owner and an overriding royalty owner. These owners receive a flat percentage "off the top," so to speak, of the well proceeds. The remaining owners are known as working interest owners. Each owns a working interest percentage of the well proceeds. Each must calculate her net revenue interest in production.