Received Division Order from PDC Energy, Inc for Buzzard North 6972, A1H, and Buzzard
South 6972 B1H, Reeves County, Texas. I own the mineral rights for Section 72, Block 4.
There are 4 approved permits to drill from and into Sect 72, Blk 4. PDC Permian has 2
approved permits(389-35933 & 34) and Legacy Reserves has 2 approved permits(389-
35705 & 35746). I don't know if I should sign the Division Order now or wait. PDC Energy
has given me 10 Days to sign and return the Division Order. I don't know how this will
affect me or Legacy Reserves. Form W-1 states the permits overlap between the the two
organizations. If I don't sign now, will that result in lowering my royalty payments. I haven't
even leased my mineral rights. I will have to contest the Decimal Interest, the amount is too
low. I don't know if I have made sense or not.
Without doing a bunch of research, it sounds like your interests are pooled with other lands, which brings your numbers down, but that you are going to end up with royalties coming from multiple wells, which is actually a whole lot better than being in one well.
PDC and Legacy could have traded some of their leases or parts of their leases so that you could end up in wells operated by both. All kinds of trading goes on in the industry when the companies are drawing up their Units.
Royalty Division Orders are very carefully researched and drawn up. It would be highly unusual for them to be horribly wrong. I suggest you sign and return it. You won't receive any royalties until you do.
I assume you are aware that if you haven't leased your interests that it may be some time before you begin to receive any royalties at all. And that when you do, you will also be receiving invoices for your share of the expenses of operating the well(s).
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
PDC is drilling across N/2 of Sec 69 and 72 and Rosetta is drilling across S/2. PDC has formed 2 units and Rosetta has formed 2 units. Each unit is 320 acres, being 169 out of each section. There are a lot of mineral owners so you own a fraction of the minerals in Sec 72. As there are leases from other owners in your tract, these companies can drill. They got agreements from the other lessees. So if you are leased to Legacy or some other company, then your lease has been pooled into the units. Your DOI will be your net mineral acres / total unit acres. If you own 10% of 160 acres in N/2 of N/2 of Sec 72 = 16 NMA, then DOI = 16/320. The 320 is 160 in N/2 of N/2 of Sec 72 and 160 in N/2 N/2 of Sec 69. Actual acreage in tracts is shown on plat. Buzzard North Unit is 320.99 acres and Sec 72 tract is 162.01 acres. Contact PDC and ask about your gross and net acres in each unit in Sec 72 and how the DOI was calculated. There is a service list of partially unleased mineral owners, but your name is not on the list. If you are not leased, consider getting leased as you do not want to become a working intereat over time and have to pay expenses. This is not necessarily simple, but you need to know your fractional minerals.