No Division Order?

General Mineral Rights Discussion
1

I have recently inherited some royalty interests. I sent documentation to one company to transfer the interest (divided between three children) and didn't get any paperwork from them to sign. When I called, they said they do not send a DO or anything for me to sign. They simply executed the request and I got a check today. Question - how important is it to have this paperwork? All the other operators sent me some. Thank-you. I'm a newbie at this stuff and have lots of questions but I'll start there.

Suzanne

2

Hi Suzanne -

I've never heard of no paperwork. Seems like there should have been at least a Transfer Order, if not a new set of Division Orders. But if the checks are right and everybody's happy, I'd just go with the program.

Depending upon who is disbursing the royalty payments, the company or whoever is buying the product(s), you may need to send your paperwork to more than one company.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

3

I have seen some companies do this. Seems a little risky on their part, because getting a new DO signed can be used to show the heirs agreed on how the interest should be divided. As long as you are getting checks and they are in the correct amounts, the only reason I can think you may want a new DO is if you are concerned that any of the three children may come back and dispute the division of the interest.

4

There are many companies in the industry that no longer issue division orders when a transfer is completed. The division order no longer holds much weight in court, so they may only issue them if the owner requests one. There is no statutory requirement to issue them, and with tough times in O&G maybe they see it as an unnecessary administrative expense. Your check detail includes everything required on a division order… name, owner number, NRI decimal, well name, location, plus more… Production amounts, deductions for taxes and marketing fees, etc. If you agree with your decimal and still want a copy of a division order for your files, then just request one… most companies are happy to help.