Am I required to sign a division order?

General Mineral Rights Discussion
1

I went non-consent on a well in ND. I received a division order in the mail. It shows that I have a tract interest of .00523429, I have 41.58 net mineral acres in this 1280 spacing. Should that figure not be 41/1280=.03203125 ? I know in ND I should receive 16% royalty until payout. Thank you for your input.

2

Ok I see the interest is correct figured at 16% royalty. I would still like to know if I need to sign the division order.

3

Kevin:

You do not have to sign the Division Order in ND. The operator is still required to pay you whether you sign or not.

4

There is nothing to be gained by signing the division order. I have heard people say that the operator threatened to hold out 28% federal backup withholding if the division order were not returned, which they could not do, for not returning the division order. It just so happened that the operator combined the division order and the Taxpayer information on one page. I recommended that the person that happened to to just send the taxpayer information.

5

This division order has 6 provisions, all of which appear to benefit them. They did send a tax form as well. I will sign that form only and send it back.

6

Dear Kevin,

Just to help them understand, say that you are returning the division order unexecuted, as allowed by state law, but your decimal interest appears accurate and to please place you in line for payment.

Best

Buddy Cotten
7

What about New Mexico and Texas Buddy? Am I required to sign D/O’S?

8

Dear Rick,

NM I do not know offhand. In Texas, Division Orders are required, UNLESS specifically stated in the lease that no division order is required for payment of royalties.

Buddy