We recieved an oil and gas division order showing a reduced amount in the percent interest colume. Can this be done legally? The company had a professional survey co. come in and the survrey shows a different amount of land from what my father inheirted and we have been been recieving the same percentage amount from the time he signed the lease years ago. Shouldn't the company continue paying that agreed amount no matter what the acreage shows?

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No.

 

It is not uncommon for there to be aceage errors in older property discriptions. It was once customary to assume on a deed that a quarter quarter was 40 acres, even if it was actually just close. That is why most descriptions will sas that the property is X acres, more or less.

 

 They will pay you on what you actually own.

 

 

I  understand, but shouldn't they continue paying the agreed amount set forth in the lease agreement instead of a reduced amount? The division order states that it does not amend any lease or operating agreement between me or operator or any other contracts for the purchase of oil or gas. Does that include the % interest?

If it turned out the exact opposite, that your property was LARGER than originally described, wouldn't you want to be paid on the CORRECT amount?  

Yes, but just don't understand how the % rate can be lower than the amount of the agreed amount in the lease no matter how the much land is involved.

Dot,

  If you have 10 acres in a 640 acre unit, your total % of the unit would be less than if you have 11 acres in a 640 acre unit.

  

Dot,

  The Division order shows your % of the unit.

  If your lease shows that you will get paid 25% that will not change.

  

   I think I understand but why would that change the decimal interest? Hate to sound so ignorant but just want to be able to explain to rest of the owers as they keep asking me questions I can't explain. I do appreciate your help.

Dot,

  Here is an example:

  If you have 1.0 acres in a 640.0 acre unit:

1 divided by 640 = .0015625 (multiply this) by .25  = .000390625

  If you have 0.9 acres in a 640 acre unit:

0.9 divided by 640 = .00140625 (multiply this) by .25 = .0003515625

I hope this helps.

Yes it helps a lot. Thanks for your time and help.

The same senario would result if it turned out you did have the correct acreage, but the unit was not exactly 640 acres.

 

Unless you can question the acuracy of the survey, the new intertest is probally correct.

Dot, make sure the oil & gas co. didn't make the mistake. I am working on second mistake that O&G companies have made in acreage we have. Don't assume that it that YOU have wrong amt. Is there a right of way included in your land that they are not counting? Issues like that

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