Completed Project Report


Managing Volatility in Oil and Natural Gas Royalty Income on the Farm

  • Award Amount: $35,000
  • Regional Center: Northeast Extension Risk Management Education Center
  • Grant Program: 2016 Education Projects
  • Project Director: David Messersmith
  • Email: dtm101@psu.edu
  • Organization: The Pennsylvania State University

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Project Overview

This project addressed legal and financial risks on diverse family farms, large and small, associated with oil and natural gas royalty income. Many farmers in Pennsylvania are using royalty income streams from energy development to supplement farm income and to make important capital investments. Additional farms in Pennsylvania and other energy states such as Ohio, West Virginia, North Dakota, Montana, etc. are being impacted as development continues. However shale well production declines and price volatility introduce significant levels of risk to the royalty income stream and ultimately to the farm family and farm business.


This project addressed reading oil and gas royalty statements, understanding volatility in energy markets, and making farm management decisions based on expected royalty income. In addition, participating farmers, educators and industry supporters gained access to Penn State's Royalty Calculator & Decline Curve Web App (shaleroyalty.org) so they could visualize expected future royalty income.

Number of Participants: 133

Results

Project Steps

PROMOTIONAL MATERIALS

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EDUCATIONAL MATERIALS

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REPORTS & EVALUATIONS

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DELIVERY AREA

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