First, one most know how much land is owned by them in an established unit where the well is drilled. For illustration let's say one owns 20 acres of a 160 acre unit. Next through negotiations on the original oil lease we will know what percent of the production will go to the owner as royalty commonly expressed as 1/5 (a fifth),1/4 ( a quarter) or less, etc. Let's assume in this example the negotiated amount was 1/5.
20 acres over a 160 acre unit equals .125 times .20 (1/5) eguals .025 which will be the fractional ownership interest assuming that the 20 acres is 100% theirs.
Taking that .025 fractional owner interest times whatever that production sells for during a specific time period ( usually a month) will be what the owner will receive minus severance taxes. If the well produces 10000 barrels of crude valued and sold at $100. per barrel there will be $1,000,000 in sells times the .025 (fractional ownership interest = $25000 minus a severance tax going to this particular owner.
The two types of leases are operating leases and capital leases. Operating leases are typically short-term and allow a company to rent assets without transferring ownership, while capital leases are long-term and often involve transferring ownership of the asset to the lessee at the end of the lease term.
Operating lease does not give the ownership of the asset to lessee while finance lease gives the ownership of the asset as well at the end of leasing period.
Interest considered by the IRS for tax purposes to have been paid, even if no interest was actually paid.
W. L. Valk has written: 'Rechtsverwerking in drievoud' -- subject(s): Interest (Ownership rights), Forfeiture 'Pachtrecht' -- subject(s): Leases, Landlord and tenant, Rent, Law and legislation
Interest payable is the interest the company pays on any loans, leases, hire purchases, debentures, etc. throughout the year.
Interest payable is the interest the company pays on any loans, leases, hire purchases, debentures, etc. throughout the year.
Sir Sidney Kidman would have come close with a 3% ownership of Australian Pastoral Leases.
One can view a leasing calculator on the site Efunda. This website allows one to calculate monthly monthly payments and/or interest rates on leases. This allows one to make an informed decision on the better choice for their leasing needs.
leases
Commercial leases are generally locked up for a much longer term then residential leases, and it's much, much harder to break a commercial lease. One big difference between commercial leases and residential leases that a lot of people don't realize is that commercial leases are not subject to many of the consumer protection laws that residential leases are. Make sure you know what you're getting into before signing. Most commercial leases are NNN which require the lessee to pay all utilities, insurance, and property taxes. Most residential leases are on a Gross rental basis and do not directly pay NNN charges. Commercial Appraiser http://www.harriscompanyrec.com
Rick Crider has written: 'Guidebook for developing and leasing airport property' -- subject(s): Real estate development, Management, Ownership, leasing and rental, Airports, Land use, Leases
Shawn D. Halladay has written: 'A guide to accounting for leases' -- subject(s): Accounting, Industrial equipment leases, Leases