Tennessee Mineral Royalty Calculator: Your Decimal Interest

Step 1: Gather your three inputs

Your net mineral acres in the tract, the unit's spacing acres, and your lease royalty rate — from your deed, your lease, and the Tennessee Board of Water Quality, Oil, and Gas unit record.

Step 2: Compute your decimal

Decimal interest = net mineral acres ÷ unit acres × royalty rate. Use the royalty calculator to check your math.

Step 3: Account for what Tennessee takes out

A 3% severance tax on the sale price of oil and gas produced is withheld, so your net check is below the gross your decimal implies — plus any post-production deductions your lease allows.

Step 4: Verify against your Tennessee division order

The decimal on the division order must match your calculation. If it is low, the operator may have the wrong net acres, unit size, or royalty rate — reconcile it before you sign.

Step 5: Get it audited

Have the decimal and the check history verified. Valor audits Tennessee royalties stub by stub as an independent mineral manager.

What is Tennessee-specific about your royalty math

The decimal-interest formula does not change by state, but Tennessee facts change what you actually receive. Tax: Tennessee levies a 3% severance tax on the sale price of oil and gas produced, withheld before or alongside your royalty, so your net is below the gross your decimal implies. Timing: Tennessee law generally requires operators to begin paying proceeds once title is marketable in the owner's name, and to pay on a regular cycle thereafter, and like most producing states, Tennessee can impose statutory interest on royalty proceeds held past the period the law allows — confirm the current Tennessee rate. Unit size: the acres you divide by depend on how Tennessee forms drilling units — the Tennessee Board of Water Quality, Oil, and Gas can order compulsory unitization (pooling) of a pool under Tenn. Code Ann. §60-1-202, so an unleased Tennessee owner can be unitized — which decides whether your tract stands alone or sits inside a larger pooled unit (a bigger denominator, and a smaller decimal on more total production). Verification: spacing and production are regulated by the Tennessee Board of Water Quality, Oil, and Gas (the state oil-and-gas board, created by Tenn. Code Ann. §69-3-104) within the Department of Environment and Conservation (TDEC), whose records confirm the unit acres in your decimal, and your Tennessee division order should state a decimal that matches net mineral acres ÷ unit acres × royalty rate. If your Tennessee division-order decimal does not match your own calculation, do not sign until it is reconciled; an incorrect decimal underpays you every month it goes uncorrected.

Tennessee facts at a glance

The Tennessee-specific facts that shape this situation — a citable reference. General guidance as of September 2026; confirm specifics with a CPA or attorney.