We are getting ready to receive funds from our leasing company after we completed probate. We don’t understand any of the language on the documents we are to sign. It has columns…
Int Type / Pay Code / NRI / RI / SUSPEND / No Present Interest. There are 56 of these for our 20 acres. I am not sure what this represents. They say like Bone Spring and Burton Flat Deep Unit 47H or 55H or 57H???
I’m not sure where everyone has gone to learn about the wells placed on their mineral rights or the vertical drilling, the horizontal drilling, all of this. We’re supposed to sign documentation, but we’re not sure what we’re signing. Can anyone make sense of this please? We are kind of under a time crunch.
Another part says - Interest Transferred: 100%. Decimal Interest: No Present Interest. Payor may accrue proceeds until the total amount equals $100, or pay annually, whichever occurs first, or as required by applicable state statutes.
Any help is appreciated. We just feel really stupid right now and don’t want to be taken advantage of or lose funds because we signed off on something we didn’t understand. Thank you.
What document are you looking at? Does it say Division Order at the top or is it a different document?
NRI RI stands for Net Revenue Interest Royalty Interest.
You might see a decimal amount for each well.
The $100 refers to the royalties need to accumulate to $100 before you get paid. You can change that to $25.
The Bone Spring, etc are names of wells. Keep a copy of everything you sign.
This is a “Transfer Order.” Devon has funds they’ve been holding since mom died. We are afraid to sign this because the order has on it .0006321 and .00312500. We weren’t sure what those numbers mean. So, these are decimal points for calculation purposes? Thank you so much!
Those numbers are your decimal amounts for the wells of interest. They are calculated using the net mineral acres out of the gross spacing for the drilling unit, the royalty and perhaps another term for percentage of the perforations within the spacing unit. You can ask the division order analyst for the equation that they are using for each well. Ask for the net mineral acres, the royalty amount and if there is an allocation factor. Generally okay to sign the transfer doc to get the payments going and then you can make corrections later if necessary. If you can set the minimum payment to $25, that will help you in the final years to see more frequent checks.
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Thank you so much! You have been incredibly helpful.