Royalty Valuation

Commissioners of the Land Office royalties shall be calculated free and clear of all production costs, post-wellhead costs, marketing costs, and other direct or indirect costs. Including – without limitation – all costs, charges, expenditures or fees incurred for gathering, compressing, pressurizing, treating, dehydrating, separating, processing, fractionating, storing, transporting, marketing and other actions to convert the oil, gas and other products produced from the leased premises into a marketable condition.

All natural gas liquids (NGL’s) captured from the gas stream at a processing plant and sold to an independent third-party purchaser shall be valued upon the gross sales value received at the tailgate of the plant.

Note: Purchaser’s statements for all sales must be made available upon request.