Decimal Points

 I think this is correct, but will need to be fact-checked.

Current spacing off Bakken horizontal wells: 640 acres, and 1280 acres the standard; also 1920-acre spacing for longer laterals, and 2560-acre units to capture orphaned oil along section lines / along spacing units; some 5120-acre units as some fields move toward unitization.

A typical royalty used to be an eighth (0.125 = 12.5%) and some are probably getting upwards of 18%.

If one "owns" one acre of royalties in a 1280-acre spacing unit:

1/1280 = 0.00078125

typical royalty: 0.125

So, if a 1280-acre unit produces 3,000 bbls / month, a mom-and-pop mineral owner with one acre will participate in 2.344375 bbls, but...

the mom-and-pop mineral owner depending on oil company to produce, ship, and sell that oil, and so the mom-and-pop mineral owner will get only 0.125 of those bbls --> 0.125 x 2.344375 bbls = 0.29296875.

If the oil sold for $60, then 0.29296875 x $60 = $17.58, and then subtract out transportation costs, other production costs, and taxes.

Now, checking the other way:

(1/1280) x (0.125) = a decimal of 0.00009765625.

x $60 x 3,000 bbls = $17.578.