How to read a royalty check stub
A royalty check stub looks like a spreadsheet, and every operator lays it out a little differently. Underneath, the story is always the same: a well sold some oil and gas, the buyer paid for it, and you were paid your share, minus a few costs.
Below is a made-up statement from a made-up company. Follow the numbered pieces from top to bottom, then use the same order on your own stub.
- Operator
- 1Example Energy Co.
- Owner number
- 2EX-00417
- Well
- 3Example 14-2H
- Sales month
- 4January 2026
- Your decimal
- 50.00125000
- Interest type
- Royalty
| Item | Whole well | Your share |
|---|---|---|
| 6Oil sold (barrels) | 4,200.00 | 5.25 |
| 7Oil price per barrel | $68.00 | $68.00 |
| Oil value | $285,600.00 | $357.00 |
| 8Production tax on oil | −$16.07 | |
| Net oil | $340.93 | |
| Gas sold (mcf) | 18,000.00 | 22.50 |
| Gas price per mcf | $2.40 | $2.40 |
| Gas value | $43,200.00 | $54.00 |
| Gathering | $6,300.00 | −$7.88 |
| Compression | $1,800.00 | −$2.25 |
| Production tax on gas | −$3.24 | |
| Net gas | $40.63 | |
| 9Check amount | $381.56 |
The top of the stub: who, what and when
- 1Operator. The company that runs the well and mails your check. It is not always the company that owns the well, but it is the one to call with questions.
- 2Owner number. How the operator knows you. Quote it whenever you write or call. If you own in several wells, it is usually the same number on every statement from that operator.
- 3Well or lease name. Each property you are paid from, one block per well. Names are often written differently from the way the state spells them, which is why matching them takes care.
- 4Sales month. The month the oil and gas were sold, not the month the check arrived. Checks usually come a month or two after the sale, and gas can lag more than oil.
- 5Your decimal. Your share of the well, written as a decimal. Everything below is the whole well's number multiplied by this one. More on the decimal.
The middle: what was sold and for how much
- 6Volumes. Oil is counted in barrels (bbl) and gas in thousand cubic feet (mcf). The statement may show the whole well, your share, or both. Here the well sold 4,200 barrels and your share is 5.25 (4,200 × 0.00125).
- 7Price. What the buyer paid per barrel or per mcf. It can differ from the headline price you see in the news, because of where the oil is sold, its quality and the buyer's contract.
The bottom: taxes, costs and the check
- 8Taxes and deductions. Production taxes come out on almost every statement. Gas statements often show costs for gathering and compression too. What the usual lines mean.
- 9Check amount. Net oil plus net gas, for every well on the statement. Here, $340.93 + $40.63 = $381.56.
A two-minute check you can do yourself
Take any line where the stub shows both the whole well and your share, and multiply the whole-well number by your decimal. If it matches your share, that line is internally consistent. If not, write down the line and ask the operator why. Then look at the price: does it look like what oil or gas sold for that month? And look at the deductions: are there any you did not see last month?
Some stubs show a prior-period adjustment. That is the operator correcting an earlier month, and it can make a check look odd without anything being wrong. It should be labeled with the month it applies to.
This is general information to help you read your statement. It is not legal, tax or investment advice. Your lease and your state's law decide what applies to you.
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