Month: July 2019

Understanding Net Mineral Acres in the Oil and Gas Industry

Duke Ligon - Diverse Experience as Oklahoma City Oil Executive
Duke Ligon, Oklahoma City

The former Senior Vice President and General Counsel at Devon Energy in Oklahoma City, Duke Ligon now manages operations at Mekusukey Oil Company in Wewoka, approximately one hour east of Oklahoma City, as chief executive officer. Prior to launching an energy sector career that has spanned five decades, Duke Ligon studied law at the University of Texas Law School.

Mekusukey presides over an extensive portfolio of mineral interests, as well as gas and oil interests, that are acquired and managed by the company, as opposed to sold for profit. These interests includes 100,000 net mineral acres across 2.3 million gross acres in 25 states. In the oil and gas industry, net mineral acres is a term used to describe the total acreage controlled by the mineral owner compared to total gross acres comprising a specific tract of land. For instance, an individual or company entitled to 50 percent of the mineral interests mined from a 200 acre tract of land would be in possession of 100 net mineral acres.

Understanding the productivity and viability of the net mineral acres making up a portfolio is crucial to the success of oil and gas industry operators. For example, a company’s monthly cash flow is based on net mineral acres, which may be only a fraction of the valuation on gross mineral acres for a property. Furthermore, net mineral acreage is closely related to depth rights, which dictate how deep or shallow an operator must go before they have legal ownership over discovered minerals.