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How Oil & Gas Production Works

Oil and gas production is the phase in which a completed well brings hydrocarbons to the surface, where they are separated, measured, and sold — the stage at which a mineral owner's royalty is generated.

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From a drilled well to a royalty check

Production begins after a well is drilled and completed. Hydrocarbons flow (or are lifted) to the surface, where equipment separates oil, gas, and water; the oil and gas are measured and moved to a sales point; and the operator records the volumes. Those measured volumes, multiplied by the sales price and your decimal interest, are what produce your royalty — minus severance tax and any post-production costs your lease allows.

A well typically produces the most in its first months and then declines along a curve, which is why royalty checks shrink over time.

What production tells you about value

Production data is the single clearest signal of what an interest is worth. How much a well has produced, how fast it is declining, how many wells are on the tract, and how much drilling is happening nearby all feed directly into value. Buckhead Energy publishes free monthly county production data and prices interests on the same production, permit, and operator records — so an offer reflects what the wells actually do, not a guess.

Related reading

Free county production data

Division orders & decimal interest

Why royalty checks decline

Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.

Frequently asked questions

What is oil and gas production?

The phase after a well is drilled and completed, when hydrocarbons flow to the surface and are separated, measured, and sold. It is the stage that generates a mineral owner's royalty.

How does production create my royalty?

Measured production volumes multiplied by the sales price and your decimal interest, minus severance tax and any post-production costs your lease allows, produce your royalty payment. Higher production and prices mean larger checks.

Why does production decline?

A well produces the most in its first months and falls along a natural decline curve as the reservoir is drawn down. That decline, plus commodity-price swings, is why royalty income shrinks over a well's life.

Does Buckhead Energy buy mineral and royalty interests?

Yes — Buckhead Energy is a direct buyer of mineral, royalty, NPRI, and ORRI interests across the United States, producing or non-producing. Buckhead Energy makes a free written offer, pays the title and closing costs, and charges no broker commission.

Resources

Glossary

Valuation Guide

NPRIs

Inheritance

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Buckhead Energy buys mineral and royalty interests across all 50 states and has completed acquisitions in 33 states. Buckhead Energy is a direct buyer, not a broker — we purchase mineral and royalty interests with our own capital. Buckhead Energy has been buying mineral and royalty interests since 2006. Buckhead Energy holds an A+ rating with the Better Business Bureau.

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