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Question
I received Division Orders recently with my decimal interest for a 2560 acre spacing unit.  Within the unit I have 198.18 net acres in two of the four sections with royalties of 20%.  In the other two sections I have 278.71 acres with royalties of 18.75%.  How do I calculate my decimal interest?

Thank you.

Answer
Using the information you provided, your decimal of interest in the revenues from production from the unit would be calculated:

(0.20 x 198.18/2560) plus (0.1875 x 278.71/2560)
equals
(0.20 x 0.07741406) plus (0.1875 x 0.10887109)
equals
0.01548281 plus 0.02041333 or 0.03589614 of all production from the unit.

To interpret the income value of an 8-digit revenue decimal, move the decimal from its current position over to 2 digits from the end: 0.03589614 becomes 0035896.14.  Then take off the lead zeros, add a dollar sign, and any commas to convert it to currency: $35,896.14 for every $1 million in sales from the unit.

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Marsha Breazeale, M.Ed., CDOA, CPLTA

Expertise

All questions regarding division orders; ownership decimal calculations; title ownership and payer record changes (testate/intestate inheritance; deed; assignment; court order); oil and gas lease analysis for record-keeping and purposes of payment by operator or payer; pooling, horizontal wells, horizontal well allocation units; unclaimed property reporting; royalty owner relations questions. All questions concerning administration of surface land contracts and payment questions, such as for Surface Right-of-Way, Sub-Surface Right-of-Way, Easement, Surface Use Agreement. All questions regarding industry-standard and company-specific policies that affect land owners.

Experience

Sr. Staff Division Order Analyst. Certified Division Order Analyst (CDOA, National Association of Division Order Analysts) and Certified Lease Analyst (CPLTA, National Association of Professional Lease and Title Analysts) with 35 years of experience as a combination division order analyst and lease analyst in exploration and production in the oil and gas industry.

Organizations
National Assoc. of Division Order Analysts (NADOA), National Association of Division Order Analysts (NALTA), American Association of Professional Landmen (AAPL), American Society of Trainers and Developers (ASTD)

Publications
"How an Oil & Gas Exploration & Production Company Operates" and "Principles of Oil & Gas Lease Analysis: Standard Clauses", Oil Patch Press; Articles in NADOA Magazine; LandFocus EDU Professional Training Manuals

Education/Credentials
B.A.in Management from Our Lady of the Lake University in San Antonio; M.Ed. in Instructional Design from WGU Texas.

Past/Present Clients
Past 15 years: GeoSouthern Energy Corporation; Contango Oil Co./Crimson Exploration & Operating Inc.; Apache Corporation; BP America; Marathon Oil; Newfield Exploration

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