Division Order Without Actual Date?

Three full months after the oil company confirmed that we had cured the title with the last affidavits, we got division orders today. I think the decimal is incorrect, so we are going to contact them again.

The effective date just says “date of first sales” which seems intentionally vague. The well has been producing over a year at this point, I know they owe us back royalties. Should we not expect an actual date there? I mean, THEY should know the date of the first sales off that property, right?

Also, the lease we signed is 3 years old and is up in 2 months. Will they just automatically renew that? I would assume so, since there is an active well on or through the property. Thanks!

What part of effective 1st sales do you not understand? As for the lease, it is now beyond the primary term and will be in effect as long as there is production.

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I guess because we’ve been waiting for paperwork for over a year, being told repeatedly it was forthcoming next week, next month, by April, etc. They had someone call to offer to buy us out, again, even when we said specifically that we were not interested. There is a level of distrust because they’ve not held to their word repeatedly. They’ve drug it out so long that everyone else in the family sold their portion. We feel like we were being “waited out” to do the same. The offer has gone five-fold from where we started.

Most legal documents require an actual date, I don’t think it’s unreasonable to ask if this one should, too. Since the first sales is certainly now a past event, one would think they’d know the date. What is to stop them from not paying us the back royalties at this point?

I must assume that this is considered standard practice? We are not royalties people, that is why I asked.

DO’s are not legally binding documents. Some states don’t even require them.

In Exxon v Middleton, 613 S.W.2d 240 (1981), Texas Supreme Court held that the terms of the division order modified and temporarily amended the gas royalty provision of the oil and gas lease, until the DO was revoked by the mineral owner. This decision meant that mineral owners had to carefully read and alter the terms of extensive division orders which were being written to change the lease.

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