Ritchie County, WV

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All things pertaining to leasing, drilling and production in Ritchie County.

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Division Order

by Kevin Riddle

Jun 27, 2016

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.

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    Kyle Nuttall

    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.

    5

    Jun 28, 2016

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      WV Mineral Owner

      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%`

      Jun 28, 2016

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        David

        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.

        Jun 28, 2016