Advance Royalty [Energy] Law and Legal Definition

Advance royalty refers to advance payment made by the owner of an operating interest to the royalty owner for a specific number of units of minerals regardless of whether oil or gas was extracted within the year.

The following is an example of a case law on advance royalty:

The advance royalty and any accrued interest shall be paid to lessor on the permit approval date; and the advance royalty shall be applied to the first tonnage royalties due lessor for coal mined and removed during the lease year beginning on the permit approval date. If the advance royalty exceeds the tonnage royalty during that year, the excess shall be retained by lessor. [In re Estate of Fike, 385 Pa. Super. 627, 629 (Pa. Super. Ct. 1989)].