Mineral Rights Value Calculator

Mineral Rights Value Calculator

Estimate the market value of your producing mineral interests.

Total barrels of oil or MCF of gas produced per day.
Current market price per unit ($/BBL or $/MCF).
Your decimal ownership converted to percentage (e.g. 0.125 = 12.5%).
Industry standard is often 36 to 72 months of income.
Calculation Results:

*This estimate is based on the Income Approach to valuation and is for educational purposes only.

How to Value Mineral Rights

Determining the fair market value of mineral rights is a complex process that depends heavily on whether the minerals are producing (currently generating royalty checks) or non-producing. This calculator focuses on the Income Approach, which is the industry standard for producing properties.

The Income Approach Formula

The value of producing mineral rights is essentially the present value of the future cash flows the asset is expected to generate. The basic math follows this logic:

  • Monthly Revenue: (Daily Production × 30.4 days) × Market Price × Net Revenue Interest
  • Total Value: Monthly Revenue × Multiplier (Months)

Key Valuation Factors

Several variables impact the final price a buyer is willing to pay:

  • Decline Rate: Oil and gas wells produce less over time. A "flush" new well might have a lower multiplier (e.g., 36 months) because the production will drop quickly. An older, steady well might command a higher multiplier (e.g., 60-72 months).
  • Commodity Prices: Value fluctuates directly with the price of WTI Oil or Henry Hub Natural Gas.
  • Operator Quality: Large, well-funded operators are generally preferred over smaller companies that may face bankruptcy or mechanical issues.
  • PUD (Proven Undeveloped) Potential: If there are empty spots on your land where the operator is permitted to drill new wells, your value may be significantly higher than current production alone suggests.

Example Calculation

Suppose you own a 12.5% Net Revenue Interest (NRI) in a well producing 20 barrels of oil per day. If oil is $80/BBL and you apply a 48-month multiplier:

  1. Monthly Gross: 20 BBL/day × 30.4 days = 608 BBL/month.
  2. Your Share: 608 BBL × 0.125 (NRI) = 76 BBL/month.
  3. Monthly Income: 76 BBL × $80 = $6,080.
  4. Estimated Market Value: $6,080 × 48 = $291,840.

Frequently Asked Questions

What is a typical multiplier?
In the current market, most mineral buyers offer between 40 and 60 times the average monthly royalty check. Highly stable areas like the Permian Basin may see higher multiples.

Does this include lease bonus money?
No. This calculator is for minerals already under production. If your minerals are not yet leased, value is typically determined by "comparable sales" of nearby acreage bonuses.

function calculateMineralValue() { var prod = parseFloat(document.getElementById('dailyProduction').value); var price = parseFloat(document.getElementById('productPrice').value); var nri = parseFloat(document.getElementById('nriPercentage').value); var mult = parseFloat(document.getElementById('valuationMultiplier').value); // Validation if (isNaN(prod) || prod <= 0 || isNaN(price) || price <= 0 || isNaN(nri) || nri <= 0 || isNaN(mult) || mult <= 0) { alert("Please enter valid positive numbers for all fields."); return; } // Average days in a month for calculation var daysInMonth = 30.437; // Calculation: Monthly Income = (Daily Prod * Days * Price) * (NRI / 100) var monthlyIncome = (prod * daysInMonth * price) * (nri / 100); // Total Value = Monthly Income * Multiplier var totalValue = monthlyIncome * mult; // Displaying the result var resultDiv = document.getElementById('mineralResult'); var monthlyOutput = document.getElementById('monthlyIncomeOutput'); var totalOutput = document.getElementById('totalValueOutput'); resultDiv.style.display = 'block'; monthlyOutput.innerHTML = 'Estimated Monthly Royalty: $' + monthlyIncome.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + ''; totalOutput.innerHTML = 'Estimated Market Value: $' + totalValue.toLocaleString(undefined, {minimumFractionDigits: 0, maximumFractionDigits: 0}); // Scroll result into view resultDiv.scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

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