Decimal Interest
Your share of a specific well, expressed as a decimal on the division order and on every cheque stub. It combines your acreage, the unit size and your royalty fraction into one number.
Why it matters when you sell
The decimal is the number a buyer underwrites against, so an error in it flows straight into the price you are offered. Sellers who reconcile their decimals before going to market negotiate from a stronger position, because the diligence that would otherwise surface a discrepancy has already been done.
Example
Take 25 net mineral acres inside a 1,280-acre unit, leased at one-fifth. Divide 25 by 1,280 to get 0.01953125 of the unit, then multiply by 0.20 — a decimal of 0.00390625. A month grossing $1,150,000 pays roughly $4,492 before severance tax and any permitted deductions. Swap the royalty for one-eighth and the same acreage pays about $2,808 on identical production.
How this varies across the states we serve
Unit sizes differ by state, by formation and sometimes by individual well, and the unit is the denominator in your decimal. A Texas horizontal unit may be assigned 640 or 1,280 acres depending on field rules; Oklahoma and North Dakota commonly use 1,280 for long laterals; older vertical units across all of them ran 40 to 160. The same 40 net mineral acres therefore produces a very different decimal depending on which well is paying you, which is why owners with interests in several units rarely have one decimal to quote.
What to have in hand
Recalculate the decimal on each of your division orders against your own acreage figures. Discrepancies are common, they are fixable, and they are far easier to resolve before a sale than during one.
Related terms
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