Dear Terry and Mike,
A "typical" oil royalty provision reads like this:
"The royalties to be paid by Lessee are as follows: On oil, one-eighth of that produced and saved from said land, the same to be delivered at the wells or to the credit of Lessor into the pipe line to which the wells may be connected. Lessee shall have the option to purchase any royalty oil in its possession, paying the market price therefore prevailing for the field where produced on the date of purchase"
Now there are a million royalty clauses, but this one, like most on oil provides for payment to made on market value.
Now go here:
These are daily posted market prices for different grades of oil.
Oil, being a mineral, like a diamond, has various grades, based on its weight (gravity), heating content and impurities.
When you scroll down to the bottom of the semcrude postings, you will see, for each category of oil, allowable adjustments to price based on several different factors. Therefore, the market price of oil is actually set on what it is worth.
These price adjustments are not a cost that you are asking to bear, it is just defining in more detail on what market value really is. If your royalty provision in your lease reads that you are paid market value or on value received, then the clause is absolutely appropriate in the Division Order.
If your property is in Texas, you are allowed to use the state form division order that was promulagated by statute. The national association of division order analysts also have their own form. In Texas, there is relatively new legislation (within the past 10 years or so) that states that the Division Order does not modify the Lease Form.
If you are still worried about that language, strike it out, initial it, send it in. They will likely say nothing at all, since the Division Order is actually a letter from you to them.