Receiving a Division Order (DO) is a critical milestone for any owner of mineral rights. It indicates that production has begun and your royalty interest is ready to be paid out. Because your search performance and user experience are directly affected by how you manage this information, we recommend following these professional best practices to protect your assets.
What is a Division Order?
A Division Order is a legal document used to confirm ownership and authorize payments. It typically includes:
• Decimal Interest: Also known as your net revenue interest (NRI).
• Type of Interest: For example, royalty, mineral, or working interest.
• Producing Property Name: The legal description and/or the specific well name and number.
• Owner’s Name: Your identifying information as recognized by the operator.
Who Prepares & Distributes Division Orders?
The operating company prepares and sends Division Orders to all owners of an interest in a producing well. These documents are created only after the title has been confirmed, the well has been drilled, and production has officially begun.
Note on Timing: You should not expect a DO on a well that is not yet complete. Mineral royalty owners generally receive them through the mail, often months after the well is finished.
What Do I Do When I Receive My Division Order?
Once you receive a Division Order, you must review, sign, and return it to the operating company. However, do not sign and return it until you are 100% confident it is accurate and you are satisfied with all outlined information.
Accuracy is Key: If any information is incorrect, you must contact the issuing company immediately.
Record Keeping: We highly recommend making a copy of every DO you receive.
Digital Management: Implement a professional digital document management system to track your interests over time.
Payment Requirement: It is important to know that in most cases, you will not receive your royalty payment until the signed DO is returned.
What if I Haven’t Received My Division Order?
If you know production has started but your DO hasn’t arrived, take these steps to expedite the issue:
• Contact your Operator: You can typically find their contact details online.
• Contact the Purchaser: Reach out to the entity purchasing the oil and natural gas.
• Consult a Professional: Contact a mineral management company or an oil and gas outsourcing expert to represent your interests.
Working with a Division Order Analyst
When reaching out to an operator, ask to speak to a Division Order Analyst. These professionals maintain the company’s “pay decks” and ensure ownership data is correct in their systems.
To ensure an efficient transfer of royalty interests, provide them with:
1. Basic Information: Your name, address, and unique owner number.
2. Recorded Documentation: Any documents from the appropriate county clerk where the properties are located.
3. Inheritance Data: If you recently inherited mineral rights, provide the former owner’s name, address, and social security number, along with estate documents such as a probated will, letters testamentary, or affidavit of heirship.
Professional Tip: If you cannot reach an analyst by phone or email, compose a certified letter via USPS to ensure your documentation is received and tracked.
Valor is Your Guide to Complex Interests
Managing mineral rights can be overwhelming. Whether you need a second set of eyes to review your documents or you require comprehensive oil and gas back-office support, Valor is here to help. We provide the technical expertise needed to maximize your royalty potential and ensure your digital records are perfectly maintained.
Contact Valor Today
Contact us today if you need help see how our mineral management solutions can help you organize, optimize, and monitor your assets.
The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
