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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: rz who wrote (19663)3/4/2003 11:34:42 PM
From: Ed Ajootian  Read Replies (1) of 206287
 
Gross production from the well.

So when a company says they have a 40% working interest in a well that is producing 25 mmcfd, and the well is located in the federal waters, and there is no royalty relief on that block, then they are getting 8.75 mmcfd net (25 x 87.5% x 40%).

The MMS regularly grants royalty relief on offshore blocks that are costly and/or risky to drill (usually deepwater).
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