Can a DO change the terms of the Lease? For example, can a DO indicate certain charges to prepare the oil and gas? My lease says no deductions with no clause saying “except for”.
DO’s can not change the terms of the lease.
If a company uses their own form, the DO can change the terms of the lease. I have seen some bad ones which I would not sign. If you use the NADOA form or the company uses the NADOA form, it specifically says that it does not change any terms of the lease.
(NADOA-National Association of Division Order Analysts). You can get the most recent version from NARO.
Thank you, Todd. My DO says The following provisions shall apply to each interest owner who executes this Agreement. It goes on to say “The purchaser shall compute quantity and make corrections for gravity and temperature and make deducts for impurities in the oil.”
My lease says no deducts.
Personally, I would not sign that DO as it would make deductions when your lease says not to. You can use the NADOA form instead. And watch your check stubs like a hawk.
Thank you, Martha. I will try to get a copy of the NARO DO.
Royce, this link should get you to the NADOA DO
Thanks Don. Also, many companies put a $100 minimum on their DO before they pay you. I usually change mine to $25 so that I can get more regular payments and keep an eye on trends. Easier to see if a check “goes missing” which has happened to us before.
I keep an Excel spreadsheet to track the checks for each company. A long time ago, we had checks stolen at the post office when a guy would see corners of checks peeking out of a PO box. He would take them and cash them for himself. That was a mess.
About a year ago, we missed a bunch of June checks. I was wondering when they would show up, so I was going to write all the companies for a reissue before the end of the year so they would match the 1099s. . Turns out they were in a mail truck that was parked in Kansas until the Christmas season. The boxes at the back of the truck were empty, but not the rest of the truck. They showed up in December in the Christmas mail rush. Funny things happen.
Martha, I too am creating an excel spreadsheet to track checks. Can you suggest some things that I should be tracking (column headers)? Any help would be appreciated.
Thank you, Don! Just what I needed.
Another couple of questions before I mail the DO off. Should I attach a note to the NADOA DO saying I want to be paid according to my lease agreement without any deductions, as per lease agreement? Or will the NADOA DO speak for itself? Thanks!
Attach a copy of your lease with pertinent information highlighted.
I also received a DO recently with Deductions included in the DO like you have received. I crossed thru those items that discussed deductions. Also, I included a letter detailing my Exhibit A clause for no deductions, and included a copy of the lease. I also pointed out in the letter that my lease (Exhibit A ) has a clause that says the DO can not modify the terms in addition to not allowing deductions. .
I had previously called the company about the concern I had with the DO and they seemed to understand and asked me to response with a letter.
We will see how this turns out – I have received the first check ( with deductions ) about a week later, and the next one is due in a week or so from now. I also send a letter to the Accounting Department pointing out my lease clauses ( no deductions) and asking for interest on this first payment which had two months late amounts in addition to reimbursement for the deductions… this may be a long drawn out deal – hope not
Technically Oklahoma does not require a division order. Some owners refuse to return anything except a W-9 and direct deposit form.
Thank you for the suggestions. It is really disappointing that one has to jump through hoops in this matter,
Remember — it’s the Wild West out there in this oil/Gas business… Be very careful what you agree to. The key is to have the Lease in shape at Lease signing…see an attorney if you have questions — By the way I am not an attorney and my views are just casual observations and should not be taken too seriously.
I have mineral rights in this same area. In July 2018, I signed a lease with Tundra Energy, and at the same time, my sister signed with a different company. A couple months later, she got her full bonus amount. I’ve still received nothing. I’ve contacted the company several times, and they keep saying they can’t pay because it’s all tied up in court still, since 16 months ago, but they can’t tell me why it would only apply to me and not my sister. Is that even possible? What should I do to resolve this? Thank you for any help you can provide.
Has your lease been filed of record at the court house?
Yes, it was filed October 2018.