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What is a division order from an oil company?

A division order is a record of your interest in a specific well. It contains your decimal interest, interest type, well number and well name. Division orders are issued to all that own an interest in a specific well after that well has achieved first sales of either oil or gas.

What is the purpose of a division order?

The purpose of a division order is to protect the company paying the royalty (payor) from double liability. If you sign a division order and it turns out that you should have been paid a larger interest than shown on the division order, the company is protected as long as it paid ing to the division order.

How do you calculate decimal interest on oil and gas?

Your decimal interest is the interest in all of the oil and gas that is produced from the unit or pool. For example, if the unit or pool produces $10,000 worth of oil and gas and your decimal interest is . 0025, your share of that $10,000 is $25.00 ($10,000 x . 0025 = $25.00).

How do you get a division order?

A Division Order is generally received by a mineral rights owner through the mail within 3 to 4 months after well completion. Click here to view a Division Order Model Form from NADOA. The model form provided by the National Association of Division Order Analyst (NADOA) meets most state requirements.

What is the purpose of a division order?

The purpose of a division order is to protect the company paying the royalty (payor) from double liability. If you sign a division order and it turns out that you should have been paid a larger interest than shown on the division order, the company is protected as long as it paid ing to the division order.

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What is division of interest oil and gas?

A Division Order is a document which lays out the proportional ownership in produced hydrocarbons, including crude oil, natural gas, and NGLs (mineral property). Sometimes the Division Order is referred to as a division of interest. More often than not, a single well or lease will have multiple owners.

What is a division order in Texas?

A division order is a contract between you and the operator (an oil and gas company). Typically, receiving a division order means that the operator is about to drill, or that the operator has already drilled a well and your minerals are producing.

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