Desk Focus 03 · MORs, NMA & 8-Decimal NRI
Mineral Ownership Report & NRI Mentorship.
Turning a 90-instrument runsheet into a Mineral Ownership Report (MOR) where every column sums to 1.00000000 is where most errors surface. Bring a draft MOR or unit calculation sheet and walk through the fraction trees, NPRI deductions, and leasehold NRI math with a mentor.
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Sample MOR excerpt · NPRI deduction check. Tract 1 (80.00 gross ac.) in a 640.00-acre pooled unit (Tract Factor = 0.12500000). Generic parties.
White chalk: the mentee's MOR draft. Yellow chalk: a mentor's notes.
| Line | Type | Owner | Royalty | MI / NMA | RI | Unit Decimal (x 0.125) | Mentor's notes |
|---|---|---|---|---|---|---|---|
| 1 | MI | Dunn, E. M. | 1/5 OGL | MI 0.5000NMA 40 ac. | 0.1000 | 0.01250000 RI (before NPRI) | Wait: Dunn's 1/2 MI is burdened by the 1/4 floating NPRI in Bk 77/301. Subtract the NPRI from Dunn's 0.1000 gross royalty (leaving 0.0750 tract RI to Dunn). |
| 2 | NPRI | Carter, J. W. | 1/4 of RI | MI 0.0000NMA 0 ac. | 0.0250 | 0.00312500 NPRI | Good: 0.50 MI x 0.20 royalty x 0.25 NPRI = 0.0250 tract RI, times 0.125 tract factor = 0.00312500 unit NPRI. |
| 3 | WI | Sample Oil Co. | Lessee (1/2) | WI 0.5000Net 40 ac. | 0.4000 | 0.06250000 WI / 0.05000000 NRI | Check: Lessee NRI (0.05000000) + Dunn RI (0.00937500) + Carter NPRI (0.00312500) = 0.06250000 unit WI. |
What we go through on an MOR & NRI sheet
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Exact fractions before 8-decimal rounding.
Keeping numerator/denominator fractions exact through every estate split and conveyance so 1/3, 1/6, and 1/7 shares do not drift before the final 8-decimal column.
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Fixed vs. floating NPRI burdens.
Distinguishing a fixed fractional royalty ("an undivided 1/16 of all oil and gas produced") from a fraction-of-royalty ("1/2 of the usual 1/8 royalty"), and tracing which mineral share bears the burden.
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Proportionate reduction and ORRI carves.
Applying the lesser-interest clause when a lessor owns less than 100% of the minerals, and checking whether an assignment's overriding royalty (ORRI) also reduces proportionately.
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Pooled unit vs. allocation well participation.
Calculating tract participation factors by surface acreage in a pooled unit versus productive lateral foot between first and last take points (FTP/LTP) in a horizontal allocation well.
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