1. What is Net Revenue Interest?

Net Revenue Interest (NRI) represents an owner's share of revenue from oil and gas production after deducting royalties and other burdens. It determines the actual percentage of net revenue that a working interest owner receives from production operations.

2. How Does the Calculator Work?

The calculator uses the Net Revenue Interest formula:

Where:

• \( NRI \) — Net Revenue Interest percentage or amount
• \( \text{Working Interest} \) — Owner's share of costs and revenues (%)
• \( \text{Net Revenue} \) — Total revenue after royalties and deductions (USD)

Explanation: The formula calculates both the percentage ownership in revenue streams and the actual monetary value of that interest based on net production revenue.

3. Importance of NRI Calculation

Details: Accurate NRI calculation is crucial for determining revenue distributions, evaluating investment returns, and understanding the economic value of oil and gas interests. It helps investors and operators make informed decisions about production sharing and profit allocation.

4. Using the Calculator

Tips: Enter working interest as a percentage (0-100%) and net revenue in USD. The calculator will provide both the NRI percentage and the corresponding monetary value. Ensure all values are valid and within reasonable ranges.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between Working Interest and Net Revenue Interest?
A: Working Interest represents the cost-bearing ownership percentage, while NRI represents the revenue-bearing percentage after deducting royalties and other burdens.

Q2: How are royalties accounted for in NRI?
A: Royalties are deducted from gross revenue before calculating NRI. NRI is calculated on net revenue after all royalty obligations are satisfied.

Q3: Can NRI be higher than Working Interest?
A: No, NRI is typically equal to or less than Working Interest since it accounts for royalty deductions and other burdens on production revenue.

Q4: What factors affect Net Revenue Interest?
A: Royalty rates, overriding royalties, production payments, and other contractual obligations can reduce the NRI percentage below the Working Interest percentage.

Q5: Why is NRI important for investors?
A: NRI determines the actual revenue share an investor receives, making it essential for evaluating investment returns and comparing different oil and gas opportunities.