I have been presented with a division order that appears to arbitrarily allocate royalties. I am in the 643.2 acre section with the initial take point that is only allocated 22.996% where 2 other smaller sections (481.65 acres with 40.2% allocation and 320.825 acres with 36.809% allocation) There is no explanation of the differences nor is there an enclosed survey to explain. Is this the usual expectation in Texas? I do not have an explanation yet from Continental.
Allocation by acreage is used where there is a pooled unit. Most likely this is an allocation well. The production is allocated based on the percentage of productive lateral wellbore across each tract. Productive lateral is the distance from first take-point to the last take-point. Look at the as-drilled plat filed with the completion report to see the total productive lateral and the breakdown among the tracts. Apparently only 22.996% of the wellbore is on your section. If your tract is not in a unit, then your DOI will depend on your proportionate interest in the tract. If your section or tract is part of a pooled unit, then the DOI will depend on the unit allocation. It is a good idea to verify your royalty decimal before signing a division order.