When negotiating an oil and gas lease, one of the most important terms is the royalty rate—the share of production revenue paid to the mineral owner. Historically, a one-eighth (12.5%) royalty was standard. Today, however, competition for acreage and modern drilling economics have shifted the market upward.
Caddo Minerals analyzed over 200,000 lease filings recorded between 2023 and 2025 to understand where royalty rates stand today across the major U.S. producing basins.
This visualization (a “violin” plot), based on leases recorded within the last two years, shows how royalty rates vary across key U.S. basins. The width of the plot indicates how common that royalty rate is in the region.
Below is a table showing the median lease royalty rate and the typical range by region:
| Region | Median | Typical Range* |
|---|---|---|
| Anadarko | 20% | 18.75% – 20.00% |
| Bakken | 17% | 16.67 – 18.75% |
| Delaware | 25% | 20.00 – 25.00% |
| Eaglebine | 20% | 18.75 – 20.00% |
| Eagle Ford | 20% | 20.00 – 25.00% |
| Haynesville | 20% | 18.75 – 20.00% |
| Midland | 25% | 20.00 – 25.00% |
| Niobrara | 17% | 15.00 – 20.00% |
* Half of all leases analyzed fall in this range.
Regional Takeaways
Permian Premium
The Delaware and Midland basins continue to command the highest royalties — averaging around 22–23% — reflecting strong drilling activity and intense competition for mineral rights.
Bakken and Niobrara Below Average
The Bakken (North Dakota) and Niobrara (Colorado/Wyoming) basins typically range from 16–18%, lower than the national median. These regions have many older leases and slower recent activity.
Texas and Gulf Coast Holding Steady
Areas such as the Eagle Ford and Haynesville hover near 20%, suggesting a stable, competitive environment for leasing.
What’s Considered a “Good” Royalty Rate in 2025?
In today’s market:
- 20–25% is generally considered a strong royalty rate.
- 18.75% (3/16) remains common in older or less active basins.
- Anything below 15% is increasingly rare for new leases.
A difference of just a few percentage points adds up: moving from 18.75% to 25% represents a 33% increase in total royalty income over the life of a well.
Don’t Forget Lease Terms Beyond the Rate
While the royalty percentage is important, deductions and post-production costs can have an equal or greater impact on your net income. When evaluating an offer:
- Review cost-sharing clauses carefully.
- Ask whether royalties are “cost-free” or “net of expenses.”
- Consider lease bonuses and term length in the full context of market value.
Summary
A “good” royalty today depends on where your minerals are located:
- Permian Basin: 25%
- East Texas / Gulf Coast: 20%
- Rocky Mountain Basins: 16–19%