Oil & Gas Royalty Valuation Model — Know What Your Minerals Are Worth Before You Sign Anything
A 30-year discounted cash flow for your specific royalty interest — built from basin-calibrated well decline curves, not a rule of thumb someone quoted you.You've got an offer in hand, or a lease renewal, or a letter from a landman — and no independent number to check it against. That's the position this tool is built for.This isn't a guess dressed up as a spreadsheet. It's a full discounted cash flow model, calibrated separately for six major shale plays, that turns your acreage, your royalty rate, and your wells' actual production into an estimated present value — and, more usefully, a value per net mineral acre you can hold up against any number a buyer puts in front of you.Who this is forBuilt primarily for owners evaluating a specific offer — a purchase offer on your minerals, a lease bonus, a buyout from a sibling or co-owner, anything with a dollar figure attached that you'd like a second opinion on before you respond.It also works if you're not there yet and just want to understand what a royalty interest like yours is generally worth. But the model is sharpest, and most useful, once you have a number to test it against.The one figure that matters more than the totalEvery tract is a different size, so a single total value tells you little on its own. What actually lets you judge an offer is dollars per net mineral acre — a figure you can compare across tracts, across buyers, and across time. The model calculates this automatically, on every run, right next to the total. If someone offers you a number, this is the number to put next to it.How it worksSix basins, each calibrated separately: NE Marcellus (dry), SW Marcellus (wet), Utica, Haynesville, Permian Midland, Permian Delaware. Each has its own first-year decline rate, b-factor, terminal decline, peak production rate, and price differential — pulled from basin-specific data, not a single generic curve stretched across plays.Decline that accounts for well age. A basin's headline decline rate describes a brand-new well. Apply that same rate to a four-year-old well and you double-count the steep early decline — a common way these estimates go wrong. This model reads each well's age and takes the decline from where that well actually sits on the curve, so a 40-month-old well isn't penalized as if it were new. You can also enter your own decline rate directly, from your own production history — twelve or more months of your own statements beats any type curve.Up to eight wells, each with its own age, production rate, and royalty decimal — for tracts that span multiple units or multiple pads.State severance tax, including Louisiana's price-conditional exemption below $4.50/MMBtu, applied automatically.A 30-year monthly cash flow, fully visible if you want to audit it, never something you have to touch to get an answer.An Offer Evaluator tab. Enter what you were offered, and see the discount rate — the effective return — the buyer is underwriting on your own forecast. This is the tab built for exactly the situation most owners open this file in.Every input is editable, with the base assumption always visible next to it, so you can see exactly what you changed and reset it if you want to.What's insideTen tabs: Start Here, Read Me, Inputs, Wells, Price Deck, Cash Flow, Summary, Offer Evaluator, Glossary, Basins. No macros — opens and runs in Excel or Google Sheets.The workbook ships with a worked example already filled in (a Haynesville tract in Louisiana), so you see real numbers the moment you open it, before you've touched anything. Swap in your own acreage, royalty rate, and well data and every figure recalculates.What this model does not doIt doesn't read your lease or interpret your division order — those are legal questions, and this tool takes no position on them. It doesn't judge whether deductions on your royalty statement are permitted. It doesn't publish a "typical multiple" for your basin — reliable transaction data on individual royalty sales isn't public, and any multiple someone quotes you should be treated as their negotiating position, not a benchmark. And it values the wells that exist, not the odds that more get drilled — that judgment is yours to make, in the one cell reserved for it.In short: this is an economics model, not a legal, land, or tax opinion. It won't replace a landman, an attorney, or a CPA, and it isn't trying to.This is an estimating tool built from published, basin-level assumptions — not a reserve report, not an appraisal, and not a substitute for professional advice. It's the same kind of model an equity analyst would build to get a defensible first number, made usable by someone who's never opened a production report in their life. Full disclaimer is in the workbook.
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