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Oil/Gas/Division Order. What is it?


Hi I received a division order from a share inherited through  my dad on oil, production and natural gas to a decimal interest of 0.00000349. In acres 498.683. I don't know how this works does it mean that is a small interest from those acres. I need to sign the papers and send them back. I want to make sure of what I'm signing first.

A division order is a document sent out once a well starts production. It's purported purpose being to spell out, in decimal form, the percentage of the well they plan to pay you on. The decimal is arrived at by taking into account how many acres you own in the well's drilling and spacing unit, as well as the royalty you agreed to in your lease. The decimal you provided indicates a VERY small interest.

Unfortunately, many companies include language on the division orders they send out that attempts to change what you agreed to in your lease, or adds conditions of payment not originally agreed to in your lease. This is why you really should not sign a division order without understanding what it says.

In Texas, a purchaser can require you to sign a division order before they pay you, AS LONG AS it is in a format that complies with Section 91.402(c)(1) of the Texas Natural Resources Code. A division order in Texas (and most other states) is revocable by either party with thirty days written notice. If there is anything on it other than what's in the above statute, I'd be a little wary about signing it because it might cause you to receive less money than you would otherwise.

Since your interest is apparently very small though, I wouldn't worry too much about signing the division order (you're not going to get much no matter what,) but you still might want to check the above statute to see if anything is included in what they're asking you to sign that is "extra" and therefore perhaps detrimental to you.

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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