The Hawaii Oil and Gas Division Order is a legal document that serves as a contract between the owners of oil and gas interests and the operator or producer of the wells in the state of Hawaii. It outlines the distribution and disbursement of revenues generated from the production of oil and gas resources. The Division Order is designed to protect the rights and interests of all parties involved in the extraction and production process. It typically includes detailed information such as the legal description of the producing well(s), the proportionate share of production allocated to each interest owner, and the necessary instructions for payment. In Hawaii, there are primarily two types of Oil and Gas Division Orders: 1. Working Interest Division Order: This type of division order is issued to the owners or entities that hold a working interest in the oil and gas well(s). A working interest owner contributes to the costs of drilling, production, and operational expenses in proportion to their ownership percentage. In return, they receive a portion of the revenues generated by the sale of oil and gas. 2. Royalty Interest Division Order: Royalty interest owners do not bear the burden of production costs. Instead, they receive a percentage of the revenue generated from the produced oil and gas as a royalty payment. These owners typically hold mineral rights on the property and earn a consistent income from the production without being responsible for operational expenses. Both types of division orders are essential for maintaining transparency and fairness in the oil and gas industry in Hawaii. They ensure accurate payments are made to the appropriate interest owners and provide a framework for resolving any disputes related to revenue distribution. The Hawaii Oil and Gas Division Order plays a crucial role in facilitating effective resource management and establishing a mutually beneficial relationship between interest owners and operators. It serves as a legally binding agreement that protects the rights and interests of all parties involved in the oil and gas production industry in Hawaii.
Hawaii Oil and Gas Division Order
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FAQ
A Division order is an instrument that records an owner's interest in a specific well. It should include the name of the well, the well number, interest type, and your decimal interest.
To put it another way the formula is: lessor's acres in unit ÷ total number of acres in unit × lessor's ownership interest × lessor's royalty percentage = lessor's decimal interest.
The decimal interest is calculated by dividing the number of acres the landowner has in the unit by the total number of acres in the unit, multiplied by the royalty percentage under the gas lease.
A division order analyst works for a petroleum company and oversees company records. As a division order analyst, you establish, prepare, review, approve, and maintain documents regarding production and land ownership for royalty owners. You generally work as a part of the land department at an oil company.
A Division Order is an instrument which sets forth the proportional ownership in produced hydrocarbons, including crude oil, natural gas, and NGL's. Sometimes the Division Order is referred to as a division of interest.
A division order is a contract between you and the operator (an oil and gas company). Typically, receiving a division order means that the operator is about to drill, or that the operator has already drilled a well and your minerals are producing.