Replies to This Discussion

Permalink Reply by Sal on October 18, 2010 at 13:28

This is the easiest way I know. Say you have 80 acres in a 640 unit. Divide 80by 640 and you should get 12.5.
So you own 12.5% of this unit. Multiply this by 1/8 or 12.5% for your interest or 1/4 or 25% if you own 1/4 interest. If you are like me, you own 1/8 interest. I'm living with an old lease that was only 1/8th. Hope this helps, remember divide your acreage by the number of acres in your unit. Take this figure and multiply it by the
interest rate that you own. For my example of 80 acres of 640 your decimal would be .015625 if you have only 1/8th interest. I think you'll be able to figure yours from this. Hope so. S. Lambert

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Permalink Reply by Linda Whatley on October 18, 2010 at 13:29

Coyote Ugly,

Please accept my friend request, and I'll send you a message.

Linda

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Permalink Reply by Coyote Ugly on October 18, 2010 at 22:41

How do I accept a friend request? I'm a dumb coyote.

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Permalink Reply by Linda Whatley on October 19, 2010 at 9:07

You will see an invite on the upper right hand of your screen next to Friends. Click it on and then select "accept".....

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Permalink Reply by Coyote Ugly on October 19, 2010 at 11:46

I don't see invite, but I do see friends. when i click friends it says i have only one (Keith Mauck). I didn't know i had any. i need more help i guess.

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Permalink Reply by Doc L'Herisson on October 18, 2010 at 14:01

Hello Coyote Ugly:

There are more than one type of division orders. On an oil lease, a division order might be used to designate the porportion of ownership of a particular parcel of land between co-owners. This can be part of the lease or a separate document. If rent or royalty is involved, it stipulates interest per owner in any particular parcel and it may or may not designate the amount per party to be paid (in rent). In my experience, the amount is stipulated per owner. In this case, the owners of the land and minerals agree among themselves as to the ownership of each in the parcel.


Lets make an example: There is a unit comprised of one 640 acre parcel that is owned by 4 siblings which is leased at 20%. Assume the siblings own in equal porportions all 640 acres of this unit. A royalty division order would take the 1/5th (royalty) and porportion it 4 ways (assuming all siblings own an equal share) such that each would receive 1/4 of the 1/5 royalty. This has the effect of determining an individuals net ownership of royalty or rental in the lease, and in this instance, the unit. So at this point, are you wishing to determine RDO (rental division order) for a parcel, or a royalty division order for a unit?


Producing units are generally surveyed although in this example a survey may not be very telling. If there are numerous leases in the unit (unlike the example here), the utility of a survey is much more obvious. Deeds are the basis of ownership for individual parcels of land, so yes, the deed forms a basic description that includes acres. The survey should pick up on-the-ground differences between what the deed says (more or less) with the actual situation of the land.

It can get complicated.

Good luck with finding your answer. I hope this helps.

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Permalink Reply by adubu on October 18, 2010 at 15:36

Coyote Ugly --- If I understand your question it is simply now is total acres of net minerals you have in the unit arrived at? A Title attorney will run detail title check on all minerals acres in the unit to confirm ownership and what you own going back as far as there are records( In some cases to the original Land Grant) in which the land changed hand through sales base on deeds recorded for record or heirship transfer in estate wills, etc and run to see if minerals were resevered every time ownership changed hands i.e. if minerals where ever separated from the land etc After this detail title run is completed the attorney will issue a Title Opinion on Number net mineral acres you own. Then it simple math to calculate your minerals decimal interest in the unit based on your lease % royalty, # acres you have, and # acres in the unit. You want to review to make sure the Title opinion matches your calculation of total net mineral acres you think you own. Hope this help and is what you are looking for. IF THIS IS NOT WHAT YOU WHERE LOOKING FOR LET ME KNOW AND I'LL TRY TO ANSWER AGAIN

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Permalink Reply by FXEF on October 18, 2010 at 16:04

Division Order calculations:

your acres - Acres as listed on your deed.
unit acres - The size of the unit, +/- 640 acres, usually the acres in your section.
% royalty - Royalty as listed in your lease.

your acres / unit acres X % royalty = your decimal interest

You need to make sure your numbers match what is on the Division Order.

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Permalink Reply by Coyote Ugly on October 18, 2010 at 22:38

Thanks everybody. You've really helped a lot. Here are the specifics: My lease states 30 acres, but I know I actually own 35 acres. I don't know how they arrived at their acreage number of 30. But I am sure it is 35 acres I actually own.
When the division order is computed, I just hope they don't go by what is on the lease. Instead, I hope they go by a survey, or a title opinion.
From your answers, I understand this to be the case (survey or title opinion, NOT the lease).
Have I got it right?
Please answer.

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Permalink Reply by adubu on October 19, 2010 at 0:30

Coyote---Yes they use the title opinion of their attorney to calculate your net acres of ownership. If you disagree with their title run then you may request a copy of their title run sheet they used for opinion. This would be a history of the minerals ownership as they changed hands since the original Land Grant of surface and minerals if separated at any time to present time. You can appeal if you have different data to support your claim of ownership based on deeds,etc If you can support you have 35 acres give them the data to support it. You may have to go to court house and pull research, copy deeds, wills, etc. Or you can hire Landsman or attorney to research and run title for you to support your claim. Otherwise the oil & gas operator will go with what their Title Attorney reported as opinion. When they paid you on the lease bonus money per acre was based on the landsman title run which is not as detailed run confirmation but when DO cuts operator must be as accurate as possible they are paying the correct royalty owner otherwise later they or you both may get sued if a overlooked mineral owner surfaces with documentation that they are the true owners of minerals with claim to be paid for all royalty since well has been in production. This is reason you do not want to warrant title in lease or DO if you can get by without doing that. They will generally go with last survey done on the surface to calculate the acres in legal abstract of tract of land. The operator will not go to the expense to re-survey your land by surveryor but you can have this done if you choice. Sometime resurvey is done for heirs when land is divided for estate to place ownership to individual heirs. Most resurveys I have seen done in recent years results in tract to have less acres than originally listed as but occasion you get lucky and find more acres than listed.

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Permalink Reply by Lorissa Gail on October 19, 2010 at 3:23

I have a question about division orders and percentage of interest in a well. According to the RRC website my acreage is included in a producing gas well that went on line this spring. We were late signing a lease as it was thought by the OG company that we were leased with another company and they were going to purchase it from that company. I realize it takes time to run title etc. but I was curious as to how others in the well have already received their division orders with % ownership when supposedly they are still running title on ours? Could this affect their ownership % later?

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Permalink Reply by adubu on October 19, 2010 at 5:51

Lorissa Gail---They can not change what net minerals you own and they have to pay you royalty on all production from 1st mcf gas produced and 1st barrel of oil. If late (defind by your lease terms) they owe you interest of the money until you get paid. The ownership net interest decimal in the well is calculated by TOTAL acres in unit with their total net minerals X % royalty in their lease, so their % ownership is same where there are unleased minerals in unit vs all mimerals in unit leased or not. Would recommend you call royalty relation office of operator and inquire what going on with your acres in unit and why you have not received DO. You may also need to send certified mail with request same include copy of your lease.

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