I'm trying to understand what the Division Order is for and things to look out for to make sure everything is in line to what it should be. My current understanding is it verifies your acres in the unit and you net acres within the unit. I just don't want to miss anything so any info is appreciated.
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.
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.
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.
Excellent point Kyle!
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.
It is official, you are the Queen of Information & Helpful Links. :)
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"!
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%`