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Permalink Reply by Bacon on January 14, 2010 at 5:42

The Division Order spells out the exact interest that you have in the well according to the title opinion. You get a division order after the well is completed and usually right before you get a check from the operator. It's my understanding that in LA, the lessee is not bound by the DO. If you sign it and return it, then determine later that it is shorting you, you can collect the shortfall.

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Permalink Reply by Michele Etzkorn on January 14, 2010 at 9:29

Thank you for the explanation.

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Permalink Reply by Mike Tomlin on January 14, 2010 at 5:45

Let me attempt an explanation:

A division order is issued by the operator of the well. It will provide your proportionate interest in the well, you should check the decimal interest and be sure it matches up with what you believe you own. For example,

40 acres in a 640 acre unit leased at a 3/16th royalty.

40/640 x .1875 = .01171875 = your decimal interest

The decimal interest represents your "net royalty interest" in the unit.

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Permalink Reply by Michele Etzkorn on January 14, 2010 at 9:30

And, thank you too!! I will check into all the details you have provided. I appreciate the information.

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Permalink Reply by Michele Etzkorn on January 14, 2010 at 9:29

Thank you also.

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Permalink Reply by Michele Etzkorn on January 14, 2010 at 9:30

Thank you again so much for this information.

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Permalink Reply by The_Baron on January 14, 2010 at 9:39

In Louisiana, you are under no obigation to sign the DO, however the operator will most likely take out backup withholdings.

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Permalink Reply by Michele Etzkorn on January 14, 2010 at 10:10

That's funny. I supplied my SSN/Tax ID numerous times to the issuing Operator on numerous ocassions...you'd think they'd have all this information by now, but, I think they are making sure we are in agreement on the DO percentage and putting it in written legal form so no questions can be asked later. That's my take on it.

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Permalink Reply by Missy on January 14, 2010 at 17:51

Michele,
You will receive a DO for each and every well that you have an interest in. It is my understanding that you are not required to sign the DO, but you are required to provide either your S.S.# or your tax ID #, or they will hold out a larger % of tax. Also, if you sign it, you are agreeing with the Co. that the decimal interest shown is correct. I was advised not to sign them just in case it is discovered later that the decimal interest is incorrect, you will have the right to the correct amount. Any corrrection or imput is appreciated.

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Permalink Reply by Bill R on January 14, 2010 at 17:55

I agree, I keep sending my SSN/Tax ID to them and they keep asking for it again. Got another one with my latest D.O. this week. I also received another request for an updated list of all relatives and their relationship to the family. Seems like all of this would be kept on file somewhere, right?

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Permalink Reply by Michele Etzkorn on January 14, 2010 at 19:49

Oh, that's funny, Bill!!! Just refer them to Geneaology.com...:)

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