I received a Division Order and have a few questions....first a little background.
We are a nonparticipating owner and understand that the cost we did not pay up front has to be recouped. I also understand that we will receive 1/8th of the royalty until that is satisfied. I can verify the decimal interest rate using the 1/8th rate but that rate is only accurate until the costs have been recouped. Should the Division Order state that? The Division Order does state: The Division Order does not amend any lease or operating agreement between the undersigned and the lessee or operator or any other contract for the purchase of oil and gas.....does that answer that question?
Also should we receive a statement that shows the costs being recouped?
Is it true that even though we started out as a nonparticipating owner after we receive a royalty check we are now a participating owner and will be liable for future expenses?
Last question...the mineral deed shows gross acres as 320 but the oil company is using 640. Is that a pooling number? And I really don't understand a pooling number.