How do you read the deductions on a royalty check?

Each line on a check stub, also called an owner statement, shows a well, a product, a production month, volumes, a price, the owner's decimal, and the taxes and deductions taken. To test the deductions, set each line beside the words of the lease's royalty clause and any addendum.

How do you read deductions on a royalty check?

Common lines on a stub

Gross volume and price, and the gross value they produce.
Severance and other production taxes.
Gathering, compression, transportation, processing and fuel, often under the payor's own codes.
The owner's decimal, and the owner's net value after deductions.

Setting them beside the lease

Royalty clauses differ: some say where the royalty is valued, some say what may or may not be charged, and many leases carry an addendum that changes the printed form. A landman finds the right lease and every amendment, then lays each deduction code beside the clause's words. Ask the payor for its code key; the codes are not standard.

What to send

Several months of check stubs, including one from the first months of production if you have it.
The lease with every addendum, and the division order.

We are landmen, not attorneys. This page describes the land record in general terms. It is not legal advice, and every matter turns on its own instruments.

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