Ann: First Royalty Acres Well Set to Spud, page-5

My thoughts on the numbers Dan.
Royalty is likely to be more like 20% (standard in this area is between 18.75% and 25%). Participation is in a 1,280 acre unit (2x640's) so 0.20 x 38/1280 x 100%= 0.6%. so a 1000 BOPD well will give then net production of 6.0 BOPD (note 6.0 BOPD with zero operating costs = 6.0 BOPD x WTI spot). Agree, there will be no costs associated and that Black Mesa will back in 18.75 % of the royalty after the well pays out. Yes, they have over 100 acres across 4 sections in the royalty play so conceivably they could be involved in 30-40 wells at no cost to them. Just day dreaming but 35 (wells) x 6.0 BOPD = 210 BOPD x US$48 = $3.6m per annum. Lets keep up the info sharing Dan – help to keep the spot light on this great junior oiler.
#AAA_BRK
A Grade JV Partner (Black Mesa)
A Grade Acreage (STACK Core)
A Grade Operators (NYSE:MRO & NYSE:CLR).