The Oklahoma Division Order is a legal document that plays a crucial role in oil and gas production operations in the state of Oklahoma. It serves as a contract between the owners of land or mineral rights (known as the "royalty interest owners") and the oil and gas company responsible for drilling and extracting resources (known as the "working interest owners"). The purpose of the Oklahoma Division Order is to outline the distribution of revenue from the sale of oil and gas produced on a specific tract of land. It details how the royalties will be calculated, the percentage of royalties each owner is entitled to receive, and the terms and conditions for payment. There are different types of Oklahoma Division Orders: 1. Standard Oklahoma Division Order: This type of division order outlines the standard terms and conditions for the distribution of royalties. It includes details about the owner's interest in the land, the royalty percentage, and the division order decimal. 2. Supplemental Oklahoma Division Order: This type of division order is used when there are multiple tracts of land or multiple owners involved. It provides additional information about the division of royalties among the various parties. 3. Pooled Oklahoma Division Order: This type of division order comes into play when multiple landowners agree to combine their interests and resources into a single drilling unit or a pooled unit. It outlines the proportionate share of royalties that each owner will receive based on their participation in the drilling project. 4. Shut-In Royalty Oklahoma Division Order: This type of division order comes into effect when there is a temporary cessation of production due to unforeseen circumstances or a lack of demand in the market. It specifies the royalties to be paid during the shut-in period. 5. Transfer of Interest Oklahoma Division Order: This type of division order is required when there is a transfer of ownership or change in the interest holder. It ensures that the revenue distribution is properly updated to reflect the new ownership or interest. Overall, the Oklahoma Division Order acts as a legal agreement to safeguard the rights and interests of both the royalty interest owners and working interest owners. It provides clear guidelines and transparency in revenue allocation, enabling a fair distribution of proceeds from oil and gas production in Oklahoma.
Oklahoma Division Order
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How to fill out Oklahoma Division Order?
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FAQ
The division order describes the minerals, it asks for information about yourself, and often asks you to agree to certain things related to the payment of royalties. But beware, in Oklahoma you are not required to sign and return a division order. In fact, you may be unnecessarily impairing or giving away your rights.
The record owner must: TITLE: Title the property "Transfer-on-death" by making a new deed. NAME: Name the person to get the land, home or mineral interest when the record owner dies on the new deed. This person is called the "beneficiary." SIGN: Sign the deed before two witnesses and a notary.
An attorney can create a deed or assignment that conveys the mineral rights to the new owners. The original deed will need to be recorded in the county where the minerals are located. If there are producing wells on the property, each operator will need to be notified of the change in ownership.
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 Division Order is a document whereby the revenue distributor (either the Operator or the 1st Purchaser) and the recipient (the royalty owner) agree on the exact decimal interest (Net Revenue Interest or NRI) owned within a well, lease, production unit, or field-wide unit.
?To pay Lessor for gas (including casinghead gas) and all other substance covered hereby, a royalty of 3/16 of the proceeds realized by Lessee from the sale thereof.? This simply means the operator will pay a royalty of 3/16 of revenue generated from production on the property.
Effect of Property Taxes on Mineral Rights Oklahoma has no inheritance tax. Capital gains tax must be paid on any sale of mineral rights and income generated from royalty streams. However, if the mineral rights have not been severed from the property, the county may not charge taxes beyond property taxes.
The only way to determine mineral rights ownership in Oklahoma is to do a title search at the courthouse where the property is located. To do this, you must review all deeds and other legal conveyances pertaining to the subject tract back to 1907. Mineral ownership information is not available online from any website.