Energizing Life

FAQ / Glossary


Why does my income change every month? 
Production from your well can vary greatly on a month-to-month basis, causing your checks to change in value. If your property is producing with a regular decline, your checks typically will be sensitive to the increasing or decreasing energy prices.


How is the property valuation established?

NatGas® performs a complete evaluation on every well.
This allows us to determine the value of each royalty owner's interest. The

evaluations are balanced by analyzing historical production data and

determining decline rates. That information is then used to perform future

rates of decline to predict production performance and calculate remaining

oil and gas reserves. We then use NYMEX futures pricing to help determine

the value of those reserves. 

Why do I not receive a royalty check anymore?

There are several factors that may have contributed to the discontinuation of payments.
a) The amount due may not be enough to be distributed. Many companies  wait until the amounts reach $50 or even $100 before generating a check.
b) The company responsible for distribution of payment may have changed and the transition may not be complete.
c) The well associated with your interest may no longer be producing oil or gas. All oil and gas wells are depleting and will eventually decline to  the point where they are no longer economic to produce.
d) Your interest may be in “Suspense” due to a change of address or a change of ownership not completed correctly.
To determine the exact reason, try contacting the number found on the last check you received.

How do I receive an offer for my royalty or working interest?

1. Contact NatGas® by calling Toll Free 855-442-7227 or complete the Contact information on the Property Evaluations page.
2. Your personal account manager will contact you and ask for a verbal commitment to sell your property for an agreed upon amount.
3. Send 2-3 recent check stubs from your property for verification of  income.
. Our staff will put together the paperwork necessary to complete the transaction.

Am I obligated to sell if I receive an offer? 

You are not under any obligation to sell your interest at any time.

I do not see my question covered here; what do I do?

We apologize that we did not answer your question in this forum, but we would be thankful to have the opportunity to address any question you might have via email or phone. Please feel free to contact us any time.
Sample decline curve of shale gas.



To temporarily or permanently cease production from a well or to cease further drilling operations.

The legal instrument whereby an interest is transferred to another party.

The person to whom the interests are assigned.

Person who conveys interest in an assignment.

The hole created by the drilling of the well.

The lowest or deepest part of a well.

Steel pipe placed in an oil or gas well to prevent the wall of the hole from caving in, to prevent movement of fluids from one formation to another and to aid in well control.

Check stub
Stub attached to a check disclosing well name, month of production, price received, total volumes produced, and net decimal interest of payee.

After the drilling of a successful well, the "completion" includes all the work required to make the well ready for commercial production.

Legal term for transferring the title of a property from one party to another, typically by deed (or bill of sale, etc.)

Crude Oil
A naturally occurring mixture of liquid hydrocarbons as it comes out of the ground.

A written legal document by which the title to a property is transferred from one party to another.

Depreciation Allowance
Income tax deduction allowed for the exhaustion of a natural resource.

Division Order
A Division Order is a document that an Operator of a well issues that describes the property, the operator, the legal description, the owner's remittance address and tax ID, information, if known, as well as the owners's decimal interest in the property. The Owner is asked to sign and return the Division Order. This information is used by the operator to remit proceeds to the Owner.

Estimated Ultimate Recovery. An estimate of the cumulative volume of reserves that will ultimately be recovered over the life of the well, field, or property.

A procedure undertaken to attempt to increase the flow of oil or gas from a well. A fluid (usually crude oil, diesel oil or water) is pumped into the reservoir, with such great force that the reservoir rock is broken and split open.

The person who grants or conveys lands, minerals, etc.

The person acquiring the grant of land, minerals, etc.

Horizontal Drilling
The newer and developing technology that makes it possible to drill a well from the surface, vertically down to a certain level, and then turn at an angle, and continue drilling horizontally within a specified reservoir, or an interval of a reservoir.

Joint Operating Agreement
A contract in which multiple partners who own the operating rights in a tract of land agree to share costs of exploration and development.

The person who secures leases and handles damages for oil and gas companies who are drilling wells or laying pipelines.

The person who generally owns all or part of the minerals under his lands and is entitled to lease the same. The landowner's ownership may also be limited to surface ownership.

A legal contract by which the owner of the mineral rights to a property conveys to another party, the exclusive right to explore for and develop minerals on the property, during a specified period of time.

The person who acquires the right to drill an oil or gas well.

The mineral owner who grants an Oil, Gas, or Mineral Lease.

Natural Gas
A mixture of hydrocarbon compounds and small amounts of various non-hydrocarbons (such as carbon dioxide, helium, hydrogen sulfide, and nitrogen) existing in the gaseous phase or in solution with crude oil in natural underground reserves.

Operating Expenses
The costs of operating a well.

The party designated by all working interest owners to conduct the operations for the well which is stated in the Joint Operating Agreement.

Paid-up Lease
An oil and gas lease that is paid-up through the primary term. It is paid to the Lessor when the lease is signed.

The amount of oil and gas in a reservoir calculated to be recoverable and described in measurements of barrels of oil, or million cubic feet (MCF).

A royalty is the mineral owners share of the gross production, which is free of the costs of production. It is probably the most important part of the lease to the mineral owner and is a negotiated term, amongst other terms, agreed to prior to executing the oil, gas & mineral lease.

Royalty Revenue
Funds received from the production of oil or gas, free of costs, except taxes and other transportation charges which are incurred in order to transport the product to the point of sale, which are paid to the lessor based upon the percentage of gross production.

Salt Water Disposal Well
A well into which oilfield salt water is disposed.

An oil or gas well that is capable of future production but for some stated reason, is not producing at the time.

Spacing Unit
The size (amount of surface area) of a parcel of land on which only one producing well is permitted to a specific reservoir.

Surface Owner
The person who owns the surface rights to a tract of land.

Working Interest
Interest in a well which bears the cost of operations.

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