Question 1
A working interest owner holds a 50% working interest in a well that is burdened by a 1/8 lessor royalty and a 1/16 overriding royalty. What is the owner's net revenue interest (NRI)?
Show answer & explanation
Correct answer: B - 40.625%
10 free, exam-style Certified Professional Logistician (CPL) practice questions with answers and explanations. No signup required. Work through them below, then take the full free CPL practice test to study every exam domain.
A working interest owner holds a 50% working interest in a well that is burdened by a 1/8 lessor royalty and a 1/16 overriding royalty. What is the owner's net revenue interest (NRI)?
Correct answer: B - 40.625%
A landowner owns one-half (1/2) of the minerals in a 100-acre tract. The tract is pooled into a 640-acre unit, and the lease provides for a 3/16 royalty. What is the landowner's decimal interest in production from the unit?
Correct answer: C - 0.01464844
During the primary term of a classic "unless" oil and gas lease, the lessee neither commences a well nor pays the delay rental on or before the due date. What is the effect on the lease?
Correct answer: A - The lease terminates automatically by its own terms, with no notice
A lease covering 640 acres contains a horizontal Pugh clause. At the end of the primary term, only an 80-acre pooled unit around a single producing well is held by production. Absent any other savings provision, what does the Pugh clause cause to happen to the remaining 560 acres?
Correct answer: D - The acreage outside the producing/pooled unit is released
A grantor owns an undivided one-half (1/2) mineral interest in a tract; the other one-half is already outstanding in a third party. By general warranty deed, the grantor conveys the tract to a buyer and reserves a one-half (1/2) mineral interest to himself. Applying the Duhig rule, what mineral interest does the grantor actually retain?
Correct answer: C - None - his reservation fails and the buyer is protected and made whole first
While acquiring leases on behalf of his employer, a landman is privately offered an overriding royalty interest by a third party as a reward for directing business their way. He accepts it without telling his employer. Under the AAPL Standards of Practice, this conduct is:
Correct answer: B - Improper - it is an undisclosed profit on a transaction made for his employer without consent
Under a standard AAPL Model Form 610 Joint Operating Agreement, a non-operator elects not to participate in a proposed well that the operator and other parties then drill. The well is a producer. With respect to that well, the non-consenting party generally:
Correct answer: D - Relinquishes its share of production until the consenting parties recover costs plus a risk penalty
An operator cannot obtain a lease or voluntary agreement from one mineral owner in a proposed drilling unit. The operator petitions the state regulatory authority, which orders that owner into the unit to prevent waste and protect correlative rights. This action is BEST described as:
Correct answer: A - Compulsory (forced) pooling ordered by the state authority
A mineral owner who has leased the minerals wants to drill a well, but the surface owner objects because it will disturb an existing irrigation system. Under the accommodation doctrine, how are these competing rights generally reconciled?
Correct answer: B - The mineral estate is dominant, but the lessee must reasonably accommodate the existing use where alternatives exist
Using the Public Land Survey System, how many acres are contained in the S/2 of the NW/4 of the SE/4 of a standard section?
Correct answer: C - 20 acres
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