Division Order Doesn't Match My Oil & Gas Lease

Division Orders
1

I have just recieved my division orders. The acreage on the order and the acreage on my lease do not equal. Overall the DO is missing about 1.5 acres that is in the lease total acreage. I have read that the DO does not modify or amend the terms of any oil and gas lease and royalties shall be paid as provided for in the lease. I plan on having my attorney look this over but I'm interested in seeing if anyone has had any experience with this situation?

Thanks.

2

Travis, that is fairly common. The title work done for a D.O. is often separate from, and more complete than, the title work done when leasing. An incorrect Division Order won't affect "what you own", yet it will be the basis for what the company pays. So it is best to correct any mistakes prior to signing anything. It is tedious and annoying to correct it after they start paying at the wrong rate.

It's possible they're right and you own 1.5 acres less than you thought. Ask the company to demonstrate how they derived the ownership percentages on both their Lease calculation and the D.O.. Then run your own numbers to confirm what is correct. It is also possible they're wrong and you do own those additional 1.5 acres. Good Luck.

3

Travis:

Eastern MT is correct in her reply and I would first ask the company to provide the means they used to determine your ownership percentages. I have know cases where the company was in error in figuring the correct acreages.

4

Did you look on the forms filed with the RRC to see the surveyed in unit/area/plat?

5

Thanks Eastern MT, Charles and Buddy,

I will pursue this discrepancy with the oil company since the drilling plats in the two units that I am included in and my lease acreage are the same.

Eastern MT said:

Travis, that is fairly common. The title work done for a D.O. is often separate from, and more complete than, the title work done when leasing. An incorrect Division Order won't affect "what you own", yet it will be the basis for what the company pays. So it is best to correct any mistakes prior to signing anything. It is tedious and annoying to correct it after they start paying at the wrong rate.

It's possible they're right and you own 1.5 acres less than you thought. Ask the company to demonstrate how they derived the ownership percentages on both their Lease calculation and the D.O.. Then run your own numbers to confirm what is correct. It is also possible they're wrong and you do own those additional 1.5 acres. Good Luck.

6

Isn't it possible (albeit unlikely given the small discrepancy of only 1.5 acres) that the Lessee put all but 1.5 acres into the proration unit? They could do this without "modifying or amending the terms of any oil and gas lease" as long as there were no clause therein to "Pool All Acrege."