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|Month||Texas Oil (bbls.)||Price per barrel||Royalty Payments @ 25%|
From the article “Life on the Shale” in the San Antonio Express-News that profiles Karnes County, one of the counties at the center of the Eagle Ford Shale boom in Texas:
“In the last four years, more than 1,200 drilling permits have been approved for Karnes County and about 2,000 miles of new pipeline have been laid. Karnes is now one of the top crude producers in Texas. In November, it was first again, with almost 3 million barrels pumped.
“Simple math shows the staggering wealth pouring into the county [MP: previously one of the state's poorest counties]. With oil in November bringing about $97 a barrel and with typical royalties of 25 percent, roughly $70 million was paid to local landowners for just that month’s production, not to mention the many millions more spent here monthly by energy companies and their employees.”
MP: The table above displays estimates of the monthly royalty payments paid to private landowners in the state of Texas from January to November of last year, based on: a) estimates of monthly oil production in Texas from the EIA (data here), b) the average monthly price for West Texas intermediate crude oil (data here), and c) royalty payments of 25%.
In the first 11 months of last year, it’s possible that more than $15 billion of oil royalty checks were paid to landowners in the Lone Star State, which is more than $1 billion every month, and more than $40 million every day. A similar analysis shows that more than $5 billion in royalty payments were made over the same period last year to landowners in the state of North Dakota, America’s No. 2 oil-producing state – more than $14 million every day.
There’s been a lot of media (and blog) coverage on the oil booms in North Dakota and Texas, with a lot of attention on the jobs and businesses being created due to America’s shale energy revolution, but there hasn’t always been a lot of attention paid to the “staggering wealth” that is being created from the billions of dollars in royalties being paid to the fortunate landowners in oil and gas-producing states. The shale revolution has undoubtedly created thousands of new millionaires in Texas, North Dakota and Pennsylvania since the shale revolution started five years ago, and that’s another reason that the local economies in dozens of America’s oil and gas patches are booming. Welcome to America’s millionaire-creating energy miracle.
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