NADOA apparently amended their model form division order 01/2017; the form now requires the mailing address, telephone number and email address of the party who witnesses the royalty owner’s signature. My friend (my witness) is not to keen on providing his private information to a company he has no business with. I did check the NADOA website and this form is now their recommended form. This additional information requirement seems overly invasive. I have received division orders since 2017 with out this new witness info. Has anyone else received this new form? Are people providing their witness phone number and email; or ignoring. I’m thinking of returning the division order without the extra info. I am interested in anyone else’s actions regarding this amended division order form. Thanks.
I just asked the resident expert on Division Orders at NARO. For Oklahoma, no Division Order is required at all, no witnesses are required. I do one anyway, just to have a paper trail and be able to point back to it if there are any problems years down the road. (and to give my family a paper trail!).
She is reaching out to other states to find out their rules. Will get back with any new information.
Why don’t you need a division order in Oklahoma
Each state has their own laws regarding Division Orders. In Oklahoma, signing a is not mandatory. For example, Texas must have a signed DO in order to get paid. I always sign them in OK and keep a copy so I can have a paper trail for the future.
Do I understand correctly that for a DO in Oklahoma, I can sign it and send it back with no witness signature? Or not even sign it and send it back at all?
It is my understanding that witness signatures are not required in OK (told to be by one of people that wrote the NADOA Division Order form). You do not have to send a DO back at all. I choose to do so (and send by certified mail return receipt) because I want to verify that the decimal interest is correct and to also leave my heirs a very clear paper trail. I usually use the most recent NADOA form.
You are correct. I do like to provide the following: W-9 which shows your tax id Your contact information Direct deposit if available.
The division order form published by NADOA is a generic form. It originally took 10 years for NADOA to come to final consensus on the contents that would conform to statutes in every producing state. This latest revision is based on recent changes in the laws of one or more of those states. In Texas, Title 3, Subtitle B, Chapter 91 sets out the lawful requirements of a division order that will allow a company to withhold payment until one is signed.
Specifically, Section 91.402©(1) states the pieces of information from an owner that an oil company can require, and if that information is withheld, the oil company can withhold payment until it is received (but the company must pay a statutory amount of interest on the money held). Section 91.402(d) provides a full and complete division order form that, if used, fully complies with the requirements for allowing an oil company to withhold payment until it is signed and returned.
Nowhere in ©(1) or (d) of Chapter 91 of the Texas statutes is the signature, address, phone number and/or email address of a witness required.
As a friendly reminder, any division order or transfer order mailed to an owner should include a cover letter or instruction sheet explaining how to complete and sign the enclosed order. At least 99% of owners fail to read those instructions. For a division order or transfer order issued for wells in the state(s) now requiring full witness signature and information, the instruction sheet should state that and hopefully have it in large, bold type so it can’t be missed. It’s always a good idea to read the instruction sheet before putting any ink on the division order or transfer order.
We have received a division order for Oklahoma that follows the NADOA format except for adding a sentence that states “(Oil company name) is authorized to withold payment pending resolution of a title dispute or adverse claim asserted regarding interest in production claimed herein by the undersigned.” Should we line through that before signing?
They also tell me that their company policy is to withhold payment until they have a signed division order. When I mentioned that Oklahoma law does not require a signed DO and the company would owe interest on the unpaid money, the employee just laughed because the amount owed is so small that the interest would not amount of much. What recourse, if any, would we have to force them to pay without a signed DO?
If they are a Texas company, sometimes they think they are under the TX interest which is very small, but OK can have a 12% rate if title is clear. Smaller depending upon the date of the order and if clouded title.
I sign division orders if they are correct, but substitute my own copy of the NADOA latest form. And I write and ask for interest if it is due and remind them of the statute. Then you have a paper record of your claims. Be sure and send by certified mail return receipt and keep a copy of everything.