Question about first division order for non-participating owner

North Dakota Mineral Rights Burke County, ND
1

Hello everyone,

It's been a while since I posted a question here, mainly because the information I got before was so helpful I didn't have any more questions.

I am wondering if anyone is experienced with division orders and can answer this:

We finished probate of our 3.80333333 acres and got our deed, and sent everything to Continental Resources. They sent a packet with a division order. The division order has an ownership decimal of .00049743, which they apparently calculated this way:

3.80333333 acres divided by 1223.36 acre unit = .00310892

.00310892 times .16 royalty = .00049743

Now, we have decided not to lease. There is a producing well in our unit, it was drilled 3 years ago. We were under the impression that if we did not lease, and we did not cut a check to Continental for our share of drilling, Continental would withhold/recover 150% of the initial cost of the well by keeping 84% of each payment.

If we sign this division order stating .00049743 (which incorporates a .16 royalty into the decimal), will Continental automatically change this division order once our 150% is paid off? I want to make sure we aren't inadvertently signing up for only 16% forever if the well ever pays off.

Also, does anyone know if they will withhold 84% from the back royalties, or do we get the entire back royalties and then they withhold 84% after sending us an AFE and us not responding?

Thanks!

2

After digging through some other county discussion groups, I may have answered my own questions and I will post what I believe to be the answers in case it can benefit anyone else.

It looks like, in ND, it is not a requirement to sign the division order anyway. The oil company has to pay the royalty amount regardless. So, we are going to send back the tax information and direct deposit forms, but not execute/sign the division order. That way, if there is an error in their calculation of the decimal, we haven't signed something saying we agree with it.

It also appears that the oil company will withhold the 84% from the back royalties they are holding when they pay it out.

The only question remaining is whether we will receive an AFE for a well that was drilled and has been producing prior to us getting our ownership straightened out and getting signed up with the oil company.