What Are Royalties?
A royalty is a percentage of revenue paid to a land owner (or mineral owners) from the production of oil and gas on his or her property. As energy companies produce hydrocarbons, they are required to pay a royalty to the mineral owner. This royalty generally consists of 12.5-25% of the gross revenue from the property and is free and clear of any operational costs and drilling risks.
HOW ROYALTY DISTRIBUTIONS ARE CREATED
1. Montego acquires mineral and royalty interests where there is current oil & gas production and potential for future development.
2. Montego Minerals acquires properties that have existing leases with energy companies and in most cases significant production already in “pay-status” to investors. The energy company (the “operator”) drilling wells on the property pays all drilling and operating costs and bears all risks and liabilities.
3. Montego Asset Management, LLC on behalf of our investors, collects royalty payments from individual operators based on the monthly gross revenue of currently producing wells in pay status. Montego distributes these payments monthly to the investment owners.