Oil and gas activity is divided into three segments: upstream (finding and producing hydrocarbons), midstream (gathering, transporting, and storing them), and downstream (refining and selling the finished products).
Upstream is exploration and production — leasing, drilling, and operating wells. As a mineral or royalty owner, you sit at the very top of the upstream segment: your minerals are the resource everything else depends on.
Midstream moves and stores the product: gathering lines, pipelines, compression, processing, and storage. Downstream refines crude and gas into fuels and petrochemicals and markets them to end users.
Most companies that buy mineral rights and royalties — including Buckhead Energy — operate in the upstream, non-operating part of the business, focused on the mineral and royalty interest itself rather than refining or retail.
How are oil & gas royalties calculated
Reading your royalty statement
Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.
At the top of the upstream segment. Your minerals are produced upstream; midstream then transports them and downstream refines and sells them.
A company that owns mineral, royalty, or non-operated working interests without running drilling operations itself. Mineral and royalty buyers are typically non-operating upstream owners.
Your royalty is paid on upstream production value. Midstream costs (like gathering and processing) can be deducted depending on your lease language, which is why post-production deductions matter on your statement.
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