New Mineral Owner

I have recently been found as a mineral right owner for the Wilson 0817 and the Laubhan 0409. I have few questions:

  1. Recently received Division Orders. Do I need a Landman to go over these before I sign?
  2. Where can I find production rates since 2018?
  3. Does anyone know the acreage used for each well?
  4. How can I figure out what my royalties will amount to with a 12.5% interest?

Thank you for any guidance!

Welcome to the oil and gas world! 1-You do not have to have a landman go over the DO. But a great way to get questions answered. But it is wise to double check the numbers for each well. If they use the Division Order template from the National Association of Division Order Analysts, that is better. Here is an example. 0_NADOA_Division Order Model Blank Form 2017v 2.pdf (78.2 KB)

The equation for each well is: net acres/actual spacing acres x royalty x % perforations in your section.

This is the website where you can look up the wells. Type in Wilson 0817 in the wellname. Or type in 0808N04W in the Legal Location as that is the surface location. There are seven Wilson 0817 wells. Congratulations! Do the same for Laubhan which is in 0408N04W for the surface. There are five of them! location. https://imaging.occ.ok.gov/imaging/OGWellRecords.aspx

  1. You can look up the production numbers for the last 12 months for free on the OK tax site.
    Gross Production Since that runs about four months late, that gets you a good chunk of the time. You can print a report. You can order the rest for a small fee. Type in 17 08N 04W in the location box for the Wilson wells. Type in 09 08N 04W in the location.

  2. You need to contact the operator’s Division Order analyst for the wells. Use your owner number from the top of the Division Order. Ask them what net acreage they are using and what royalty. Ask them for the exact description of your acreage and write it down. Or get them to email it to you. Very important to hang onto that!

  3. Your royalties will be based upon the decimal fraction that is assigned to you in #1. The amount each month is dependent upon the volumes of the product and the prices for that product when it is sold each month. The wells will start out very strong and decline rapidly, so we cannot tell you how much every month. You can get an estimate of the production decline and then do a forecast based upon predicted prices. This first check you get will be for the largest largest volumes. Every month will decrease which is perfectly normal.

  4. The National Association of Royalty Owners has some very good webinars on how to understand your checks, and other excellent topics. If you are not a member, they are $25, but if you join, then they credit that amount against your membership amount.

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Hi Cynletta, the Wilson 0817 is actually a seven well unit which the OTC production site:https://otcportal.tax.ok.gov/gpx/gp_displayPublicPUNListSearchDownload.php lists as a 1280 acre unit. The Laubhan 0409 appears to be a 4 well, 960 acre unit . I do not know of a cost free way to get multiple years of production data. There are several commercial services that may have this data or the following link has instructions to order the data from the OTC:https://oklahoma.gov/tax/businesses/gross-production.html

You aren’t required to call a landman to review your division orders but calling a landman is one way of trying to gain a better understanding on how the numbers are arrived at.

Your division order decimal factor gets multiplied by the production proceeds to determine your royalty. That decimal factor is determined by your royalty rate and the ratio of owned acres to the well unit acres and the ratio of owned perforations to total perforations.

Hope you enjoy what looks like a nice division order.

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have been reading your posts and you are amazing to be sharing so much valuable information! Thank you so much, Martha.

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Are you available for hire to go over these DO’s?

You can compare the wording of the DO to the NADOA form and if it is the same, then that is good. You do not want them trying to change the terms of the lease. You will have to contact the operator to see what net acres they are using for you. If you are very polite, sometimes they will send you the paragraph from the title opinion that states the title chain and the description of the acres… Quite useful to put in your files.

A DO is not required in OK, nor is a witness. Some people do not sign them at all. You do need to confirm your name and address and if you agree with the decimal amount. It is advisable to send back a W-9 so that they do not withhold federal taxes.

Thank you very much, Peter!

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So much for great wells! I received a check from EOG for 2.5 years of back royalties. $3897.07! So dissapointed!

You can turn your lemons in to lemonade for someone else. Trying donating those disappointing dollars to your local Meals on Wheels, Boys & Girls Club, Home for Battered Women and Children or your Church.

Fabulous idea! St. Judes and Wounded Warriors! :slight_smile: Thank you for the encouragement, Todd.