Replies to This Discussion

Permalink Reply by WV Mineral Owner on June 27, 2016 at 2:24pm

Kevin,

If you can provide me with the Unit Name and what name the Division Order is under, I will pull the Declaration Of Pooling from Ritchie County and see what I can learn for you.

Permalink Reply by Kevin Riddle on June 27, 2016 at 11:49pm

I haven't received the division order yet but when I'm certain I'll let you know.
Thanks

Permalink Reply by Nancy Mosley on June 27, 2016 at 3:50pm

Hi Kevin, In general the division order should show your % of the total revenue.

As I understand it, the calculation is

1) divide your acres in the unit by total acres in the unit

2) multiply that by your interest in the oil and gas (if you own all of it, multiply by 1; if you own 1/4 OGM, multiply by 1/4 etc)

3) multiply by your negotiated royalty % (if you have an 18% royalty rate, multiply by 18%

The decimal that it the result of that calculation should match the decimal on the division order. If not, call the division order analyst.

WV Mineral Owner can help if you have the information he needs to look up.

Permalink Reply by Kevin Riddle on June 27, 2016 at 11:50pm

Thanks Nancy.

Permalink Reply by Kyle Nuttall on June 28, 2016 at 4:39am

In general, just make sure there isn't anything in the D.O. that modifies the terms of the lease.  They usually say that you "certify" that you own x.xxxxxx in the unit.  I don't like anything that sounds like a promise, warranty, etc.  Scratch out "certify", initial next to it, and send it back.  Also, if there are any other clauses make sure they don't modify or negate anything that was in your lease--unless you want the change.

Permalink Reply by WV Mineral Owner on June 28, 2016 at 4:42am

Excellent point Kyle!

Permalink Reply by Nancy Mosley on June 28, 2016 at 5:24am

Yes very true, thanks Kyle!

Permalink Reply by Nancy Mosley on June 29, 2016 at 1:18pm

Here is a link to the National Association of Division Order Analysts model form

You can compare what you get with this, and if there is anything of substance different, you might submit this form instead. I read that people do that sometimes.

Permalink Reply by WV Mineral Owner on June 29, 2016 at 1:22pm

Nancy,

It is official, you are the Queen of Information & Helpful Links.  :)

Permalink Reply by Nancy Mosley on June 29, 2016 at 1:29pm

Ah, gee, that's a sweet thing to say!

And, I have had to resort to challenging an division order. Some kind soul told me about the NADOA group and their model form. Handy to have "just in case"!

Permalink Reply by WV Mineral Owner on June 28, 2016 at 4:48am

Kevin,

The 'typical' formula for a Division Order of a unitized parcel is...

MI  x  RI  x  Tract Factor = Decimal

MI = Mineral Interest (1/2 Ownership of a parcel)
RI =  Royalty Interest (15% Lease royalty)
TF = Acreage you own in the tract (The Kevin tract is 70 acres of a 350 acre unit) ~20%`

Permalink Reply by David on June 28, 2016 at 11:32pm

There could be one missing step in the above equation. The formula works if all of the owners lease acres are in the unit . So for example if the owners lease is for 100 acres and only 70 are in you must divide 70 by 100 as your starting point.