A royalty is an income stream.
A royalty interest is a cost-free share of production revenue. You do not pay for drilling or operating costs; you simply receive your share of the value of what the wells produce, month after month, for as long as they produce. That makes a royalty fundamentally different from undeveloped mineral acreage. With a producing royalty, there is an actual, measurable stream of money arriving on a schedule.
When you sell oil and gas royalties, you are selling that future stream. The buyer takes over the right to the monthly payments, and you receive a lump sum today in exchange. The central question is always the same: what is a future stream of declining, commodity-sensitive income worth as a single number now?
Not every royalty is the same. A standard royalty tied to mineral ownership behaves differently from an overriding royalty interest, which is carved out of the working interest and lasts only as long as the lease. If you hold an ORRI, the life of the lease matters to its value in a way it does not for a mineral-based royalty. Knowing which you have is the first step.