Covey Park miscalculated our interest. Now we owe them

We have been receiving money on 4 new wells for 6 months. These well are in Desoto Parish sections 20 and 28

14 n 15 w.   They sent new division orders with recalculated division of interest for these wells. They said we received too

much money and now will hold overpayments in future checks.  How do we know if it’s correct now. Does anyone monitor

these companies to make sure they have it right? How could this happen and who is a great land owners


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No.  No one is monitoring these companies for correct payment.  That is up to each mineral lessor. First, you need to calculate your decimal interest.  Divide your mineral interest in acres by the total acres in the unit.  The unit acres should be listed on your Division Order.  Then multiply that number by your royalty fraction.  Round off to eight places and compare to the decimal interest on your Division Order and on your royalty statements. It would look something like this 10 acres divided by 640 acres = 0.015625 X .25 if you have a quarter royalty = 0.00390625.

Without knowing which sections, 20 or 28, I can't look in the database to see if there is a unit survey on file.  That would tell us how many acres the company survey shows that you own.  It is common for there to be some variance between what you think you own in acres and what the survey shows.  Older surveys are generally less accurate than new surveys.  If the difference is significant, you will want to ask Covey Park for a copy of the survey If it is not already in the database.  Many companies have conducted new surveys when they drill these cross unit lateral wells.  Covey Park got this unit from Chesapeake which was notorious for poor surveys.  It would make sense for Covey Park to cover their risk by ordering a new survey.

Chesapeake cut a lot of corners.  Surveys were but one.  Some of the others may come back to bite them soon enough.

Thanks for the information 

If we can calculate our own interest and get it right, why can’t Covey Park get it right

Because you may be using different acreage totals.  What you think you own is not necessarily what they think you own.  The acreage totals used in a lot of public records (deeds, donations and even leases) are not accurate.  It depends on how long ago the survey was performed that the legal description is based on.  When an operating company establishes production in a drilling unit, they have a survey done as part of their Division Order Title Review.  If that survey shows a different acreage for your tract than the public record documents, the operator will use the survey total.



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