How to read your royalty check.

The header: who’s paying you, and for when

At the top you’ll find the payor (the operator or a third-party disbursement company), your owner number (your account with that payor — quote it whenever you call), the check date, and the production period the money covers. That period matters: checks usually pay for oil and gas sold one to three months earlier, so a “June” check is rarely June’s production.

The property lines: one row per well, product, and month

The body is a grid, and each row is a single combination of property, product, and month. Read across and you’ll typically see: the property or lease name and a well/property number, the county and state, the product (OIL, GAS, or a liquids code like NGL/PROD), the production month, the volume sold (barrels for oil, MCF for gas), and the price per unit.

Then come the numbers that turn that into your money: the gross value of the sale, your decimal interest (your fractional share, often with several leading zeros), and your gross share — the gross value multiplied by your decimal.

The deductions: why your share shrinks before it lands

Between your gross share and the net you actually receive sit two kinds of deductions. Severance and ad valorem taxes are state production taxes withheld before payment. Post-production costs — gathering, compression, processing, and transportation — are the expense of moving and treating the product after it leaves the wellhead, and whether they can be charged to you depends on your lease.

This is where two owners on the very same well can net different amounts: an older lease may allow deductions a newer “cost-free” lease forbids. If a line called “deductions” or “taxes” is quietly eating a third of your check, your lease language is the reason — and it’s worth reading.

Your gross share is what the wells made for you. Your net is what survived taxes and post-production costs. The gap between them is written into your lease, not invented each month.

Adjustments, minimums, and suspense

A few oddities trip people up. Prior-period adjustments are corrections to earlier months — a re-priced sale or a fixed volume — and they can be positive or negative. Many payors also hold your money in suspense until it crosses a minimum (often $25 or $100) or until a title question is resolved, then release it in a lump. A check that “stopped” is frequently sitting in suspense, not gone.