Replies to This Discussion

Permalink Reply by Keith Mauck (Site Publisher) on October 8, 2010 at 11:31

I would make sure I do those correctly. Have you worked through the decimal interest to make sure it is accurate? I would definitely get it notarized where it calls for it and I would save a future headache by calling the company on Monday and getting it reissued using the correct social security number.

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Permalink Reply by SueBaby on October 8, 2010 at 11:46

Keith, Can you give us the formula to figure the decimal interest. I am on a 970 acre unit.
does the size of the unit make a difference ?

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Permalink Reply by Sarah on October 8, 2010 at 12:17

Thanks Keith! I sure appreciate the input. I didn't think to make sure the decimals are good.

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Permalink Reply by Keith Mauck (Site Publisher) on October 12, 2010 at 4:07

Wow that's a big unit. Where did you get this number? Do have the original state document to confirm the unit size?

Here is a decimal interest tutorial that will be useful.
http://americanroyaltycouncil.com/Portals/_default/Skins/ARC/tutori...
It's on the American Royalty Council's website.

Take your "Net Mineral Acres" and divide this number by the size of production unit, in your case 970. Let's just say you have a 100 acres for simplicity.

100/970 = .10309 (this is a net mineral interest)

Next we need your net revenue (decimal) interest so multiply your net mineral interest by your royalty rate (let's say you are getting .25%)

.10309 x .25 = .0257725 (this is a hypothetcal decimal interest)



I have also attached the NADOA model division order form to this post for you take a look at..

Attachments:

• div_ord.pdf, 39 KB

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Permalink Reply by waltcop on October 12, 2010 at 6:45

Question?
Does the Division Orders reflect only the size of your tract as leased or does it include total of all mineral acres own within a unit? Example, I leased to company "A" and company "B" is the operating company of the unit. However, company "A" did not lease all my titled acres, plus some acres donated to the state for road ride-away (which I understand the minerals are retain by the donor for ever). So, who receives the royalties on the unleased minerals?

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Permalink Reply by DrWAVeSport Cd1 on October 12, 2010 at 8:05

Waltcop: Check out this La State Statute: per: Division order; precedence of lease; penalties for failure to pay royalties due...

http://legis.state.la.us/lss/lss.asp?doc=87831

http://legis.state.la.us/lss/lss.asp?doc=87832

http://legis.state.la.us/lss/lss.asp?doc=87834

DrWAVeSport Cd1 10/12/2010

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Permalink Reply by DrWAVeSport Cd1 on October 12, 2010 at 10:33

Copy of a Chesapeake Division Order, We remain unleased and won't sign this div. order. Have sent required info to Chk in demand letter.

DrWAVeSport Cd1 10/12/2010

Attachments:

• ChesapeakeDivisionOrder.pdf, 2.2 MB

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Permalink Reply by Skip Peel - Mineral Consultant on October 12, 2010 at 9:21

waltcop, unleased minerals do not receive royalty. Unleased minerals receive 100% of their proportional fraction of the unit production after the operator takes out the well costs. Continuing operational expenses are also deducted. There is a ton of discussions here on the site concerning participating in a unit as a UMI (unleased mineral interest). You can search the archives for those prior discussion threads. However you may want to reread you lease as many contain language that enforces the lease terms on all the minerals you own in the section covered. In which case you may want to point out to your lessor that your additional acreage should be included in the calculation of your decimal interest in the unit production.

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Permalink Reply by SueBaby on October 13, 2010 at 2:09

Keith, This is a combination of section 18 and section 17 16N 16W . We just got the division orders and it shows unit acres as 970.078589 . this is in Bethany, Louisiana and section 18 is on the state line.

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Permalink Reply by SueBaby on October 13, 2010 at 2:33

We hope this is a good well. We have no idea what production on it is. It is the
Querbes 18 H-1

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Permalink Reply by Cary Jerome Marston Huff on October 14, 2010 at 14:05

Your good neighbor will do. All they are required to have is a signature and your SSN.

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Permalink Reply by Cary Jerome Marston Huff on October 14, 2010 at 14:07

you need your real ssn. Put a line through it and put the right digit or write the complete ssn .

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