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Oil/Gas/Division Order S15, T20N, R4E Payne County, OK


QUESTION: I received a Division Order for the mineral rights lease that I have with Red Fork Investments for 22.4 acres (E/2 of S15-T20N-R4E) in Payne County, OK.

1. Does this mean that a well has been completed and is currently producing oil?

2. I am trying to calculate whether the Percent Interest listed on the Division order is correct.  I believe that I should divide my net mineral acres by the gross mineral acres pooled for the well's drilling unit, then multiply that result by my royalty rate.  The only figure that I don't have is the number of gross mineral acres pooled.  I think it could be 640 acres, but I'm not sure.  How can I get the gross mineral acres figure?

3. Is there anything else that I should check on the Division Order before signing and returning?

Thanks very much for your help.

Terri Scott

ANSWER: 1. Yes, it does mean that. In fact the "Tiger 1-15H" began producing in June, and produced over 2000 barrels that month, as well as in July. Not sure what it's doing now but likely has come down some since then as the well naturally declines each month unless re-stimulated.

2. It is a 640 well, and your formula is correct. Your interest would be about .00065625 in decimal form assuming 3/16 royalty.

3. Make sure the division order doesn't attempt to change any of the terms of your lease such as stating you agree to deductions from royalty that weren't agreed to in your lease etc. You might want to read my article in the Mineral Hub News entitled "Division Order Antics by Oil Companies" before signing for more on that.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub

---------- FOLLOW-UP ----------

QUESTION: Thanks so much for your quick response!  I have additional questions:

1.  Once I return the Division Order, is it reasonable to expect a payment within a few weeks that would cover the 7 months that this well has been producing?  Would this payment include any interest (I didn't see any anything in my lease about interest).

2.  My 2 brothers each have a lease for this same location.  Does this mean that I would only get 1/3 of the monthly payment amount that would be paid according to my lease provisions? Sorry for my ignorance, but this is all new to me!

Thanks again!

Terri Scott


ANSWER: They can take up to six months (from first production) to send you the first check from a new well. It will likely include the first few months of production. If you don't receive a payment for more than six months after first production, then interest begins to accrue at 6% annually until it's paid. You usually have to "remind" them to pay it if you are due any if it's not included with the check.

If you own 22.4 acres, then the decimal interest on your division order should reflect that as per my last answer. If you own 1/3 of 22.4 acres then you need to adjust accordingly. You will be paid according to YOUR lease, even if your brothers leased their interest too. If your lease says "3/16" royalty, then you'll get 3/16 royalty on however many acres YOU own within the 640-acre unit.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub

---------- FOLLOW-UP ----------

QUESTION: My signing bonus was calculated using $175.00 X 22.4 acres, so am I correct to assume this means I own all of the 22.4 acres?  My lease does not have anything indicating number of acres.

How will I be able to tell if the payment has interest included?  Perhaps a sheet will be included showing the amount of interest paid??

Thank you for your patience!

Terri Scott

Yes Terri, the signing bonus indicates they think you own 22.4 acres. The lease only indicates the gross acres in the tracts they are leasing, not what you own. I'd go by the lease bonus, as you did.

If interest is included when you get your first check it will likely be listed separately as such. If you're not sure whether any interest is due or has been paid there will be a phone number on the check stub you can call to ask about it.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub  


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Frederick M. Scott


Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.


I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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