My question is about division order property and DOI numbers. How does the operator come up with their property number for a well and the DOI number.
Property numbers are internal to a company based on its own standards. Same well transferred to a new company will be given a new property number. DOI is your division of interest decimal out of 100% of the well (or tract in some instances). It is your net mineral acres divided by gross well (or unit) acres times royalty rate. If you own 10 net mineral acres and we'll is drilled on 100 acres and your royalty is 1/5 - then DOI = 10 / 100 X 1/5 = 0.0200. There can be a lot of complicated factors if there is an NPRI burden on your minerals, etc. But that is simplest explanation. Most companies will explain the calculation of your DOI. But you need to know what you own and what your lease says.
/5
Thanks very good answer. The DOI then should stay the same as it is on division order. I’ve 8 different DOI numbers for one property and know of no agreements etc to explain it do you have any idea why? I still wonder how the operator keeps track of all the well property numbers without some connection to location.
William,
You probably have 8 different wells producing from 8 different units involving your lease. If your lessee is not the operator and has made a deal with the operator further burdening the leasehold interest at different times, such as before and after payout of wells, the operator(s) must account for those changes and or well locations. TennisDaze example is for one well from one zone. You may need to apply it multiple times. Answers may be found in obtaining and reviewing copies of each Division Order Title Opinion from the operator. There should be one for each Division Order. They won't give you the entire opinion but only that part that applies to the determination of our DO interest.
Gary L Hutchinson
Minerals Managment
Do you have multiple division orders or only one? If only one well and one division orders, then the next question is whether the eight DOI total to the DOI on the division order. Some operators break the well payments down depending on the number of working interest owners. Or there could be multiple tracts which have been unitized into the well and you are being paid by tract, If you post the operator, well name, county and state, then someone can give you more guidance. Or simply contact operator and ask about the DOI and property breakdown. As to the well numbers, the operator's internal accounting system ties directly to the numbers and the locations. It will make sense within the company which is important to them. There is no universal system which regulates internal accounting.