Basic information - part 2

Dear forum members! As I have mentioned in an earlier discussion, my two sieblings, a cousin and myself - all residing in Norway - have inherited a 160 acres property in Divide County where oil is being produced. We have now received a Division Order from the oil company, and we understand that we have to be accurate filling in this form.

We are struggling to understand how to calculate our decimal interest. In the lease, we have 17,5 % royalties, and each of us own 25 % of the mineral rights. What more do we need to know, and how do we calculate the decimal interest?

Bjørn - What are your spacing unit - 1280?

If all acres are in the unit, then:


Some spacing units are a little bit bigger/smaller, because the Earth is not flat. I got a unit with numbers 1280.48.

En hilsen fra Danmark

Hei Lars! Thank you for your reply!! As you see, there is a lot I don't know.... . One of those things, is the term "spacing unit". I assume it is what is described in the Division Order under "Property description" where it is described as "....containing more or less 1285,52 acres". Is that right? Why is the "spacing unit" more than twice the size of our property? The oil company calculate my decimal interest to be 0.00544527. If I put in my numbers in your calculation, this figure seems to be correct.

Hej Bjørn. My great-grandfathers brother bought a farm back in 1919 with 480 acres. Williams County. When he died back in 1958 his 13 nieces and nephews inherited the farm and the mineral rights. My grandmother got 1/13. That part is now divided. I have today 1/52. A 1280 spacing unit is the normal unit, where the oil company would drill one or more horizontal well(s). Your are pooled with the other owners in the unit. I got 7 wells in one spacing unit (most acres) and 1 well in another unit. The farm had acres in three sections.

Hei igjen, Lars! Thanks a lot for clarifying information. You say that we are pooled with the other mineral right owners within the spacing unit. Does that mean that we are paid a cut from all the wells in the unit according to our decimal interest? I believe there is 8 wells in the unit. Søndagshilsen fra et regnfullt Oslo!

Solen skinner her i København!

Yes the same numbers in your division orders!

Hilsen Lars