Not bad, until you consider that 38.3% of that r

Not bad, until you consider that 38.3% of that revenue was sold off as overriding royalty interest. Plus an estimated 18.75% (most common royalty negociated with mineral owners) of this will go to the land/mineral owner.

What is left 43% has to pay 100% of the operating expenses, drilling/work-over cost, power bill (very expensive when running pump-jacks), and overhead. When dealing with large production rates, such burdensome royalties could still yield a profit, but when producing at such low rates, it is not possible to squeeze a profit out of these numbers...

Most Operators will not lease or pursue leases with above 1/4 royalties (25%) because it is too difficult to squeeze a profit out of such numbers. 57% royalty payments are simply too high to justify operating the lease - Unless the lease yields unusually high production.

This explains why TECO didn't form a Joint Venture with TNC on their Texas Properties like they did in Louisiana. A company like TNC would want at least 60% of the net revenue generated in order to finance & execute drilling and/or work-over activities. TECO only has 43% Net Revenue Interest to start off with, so even if they gave it all to a 3rd party operator, the 3rd party would not develop the leases because it is simply not worth the investment for only 43% NRI.

TECO is making a poor business decision regarding all investments in the state of TX where they have sold off such a high royalty percentage on all current & future leases.