Expert: James H. McConnell, CPL - 9/3/2007

Question
My sons have inherited mineral rights on leases in Texas.  We have received a gas division order and an oil division order from the operating co; separate ones for each son. Since it is an inheritance, is the order negotiable or is it simply agreeing to the previously negotiated contract that was willed to my sons?  Should we have an attorney review the orders to determine if everything in the contract is in order?  Is it really even a contract, as the only place for a signature is my son; not the operating co.?  It seems to me a contract would have a place for signatures of all parties to the contract.  The wording of the order refers to "you" repeatedly, but "you" is not defined.  It appears that "you" is referring to the operator of the lease and so I don't understand why my son would need to sign for what the operator is obligated to do without the operator also signing?  Do you have a sample gas division order and a sample oil division order and examples of variations that may be used?

Answer
It's just a Division Order, it's not a contract.  the company has a title opinion prepared by an attorney that sets out the ownership in the unit. You get division Orders when they have money for you. There's nothing to negotiate.  If the decimal interest appearing in the division order as the net revenue interest attributable to the person whose name is on the Order, sign it and include a social security number or tax id and they will send you a royalty check.  Divide the net acres owned by the gross acres in the unit and multiply that number x the amount of royalty on the lease and that number should match the one on the division order.  All of that info should be on the Order.