Division Orders are arguably one of the most pertinent legal records for mineral royalty owners. In most cases, a single well will have multiple owners. Therefore, it is imperative to have an accurate and updated division of interest for producing wells.
What is a Division Order?
A Division Order will include the owner’s decimal interest (net revenue interest (NRI)), type of interest (ex: royalty, mineral or working interest), the producing property’s name (legal description and/or well name and number) and the owner’s name.
Who Prepares & Distributes Division Orders?
The Division Order is sent from the operating company to the owners of an interest in the producing well. They are created once the title has been confirmed, a well has been drilled and production has begun. However, a Division Order is generally received by a mineral royalty owner through the mail, often months after well completion. Therefore, you should not be expecting a Division Order on a well that is not yet complete.
What Do I Do When I Receive My Division Order?
Once a mineral owner receives a Division Order, they must review it, sign it, and send it back to the operating company. It is vital that the mineral royalty owner review it closely and ensure all information is accurate. Do not sign and return the Division Order unless you are confident it is accurate, and you are satisfied with all information outlined. If information is not accurate, you must contact the company that issued the Division Order. We recommend making a copy of all Division Orders you receive for your records and have a good digital document management system. It is also important to know that in most cases owners will not receive royalty payment until they have signed and returned a Division Order.
What if I Haven’t Received My Division Order?
If you know you should have received a Division Order but have not, there are a few things you can do to help expedite and rectify the issue.
• Contact your Operator (this information can often be found online)
• Contact the Purchaser of the oil and natural gas
• Contact a Mineral Management company or other professional
When you contact the Operator, ask to speak to a division order analyst. Division Order Analysts are responsible for maintaining the company’s pay decks and ensuring that the ownership information is correctly maintained in the operator’s system. Most operators have an email on their website for owner relations, start by sending an email to this email address and including your name, address, and owner number. Provide them any recorded documentation that you have from the appropriate county clerk where the properties are located. If you recently inherited the mineral rights, then provide them with the former owner’s name, address, and social security number along with any estate documents (probated will, letters testamentary, affidavit of heirship). Making sure that you provide the correct and full data to the operators will make the process easier and more efficient for them to transfer the royalty interests. If for some reason you are unable to reach the division order analyst after trying to contact them via phone and email, consider composing a letter and including all the information above and mailing it to them certified with the USPS.
If you find yourself not able to keep up with your Division Orders or want to add another set of eyes to review all information, Valor is here to help.