Division Orders
Understanding this form
A Division Order is a legal document utilized in oil and gas leasing transactions. Its primary purpose is to outline the ownership rights of the parties involved concerning the production of oil and gas from a specific property. This form allows property owners to specify their interests and any conditions or limitations they wish to impose on the lessee. Unlike a standard lease agreement, a Division Order focuses specifically on the division of production resources and the rights associated with them.
Main sections of this form
- Payor Name and Address: Identifies the entity responsible for paying royalties.
- Effective Date and Issued Date: Specifies when the Division Order takes effect.
- Owner Name and Contact Information: Details of the individuals or entities entitled to receive royalties.
- Decimal Interest: Indicates the ownership share in the total production.
- Terms on Ownership Changes: Outlines the procedure for notifying changes in ownership or interests.
- Signature Section: Requires the signatures of the owners to validate the agreement.
When to use this document
This form should be used when you enter into a lease agreement for oil and gas extraction and need to establish the terms under which the production proceeds will be divided among the owners. It is particularly important when there are multiple owners holding interests in the same property, or if there are specific conditions that require clarification outside the standard lease terms. Additionally, use this form during any change in ownership or during the transfer of royalties.
Who this form is for
- Property owners who wish to outline their interests in oil and gas production.
- Lessees entering into agreements with multiple owners on a property.
- Individuals involved in the ownership transfer of mineral rights.
- Entities responsible for managing oil and gas resources and royalties.
Steps to complete this form
- Identify the payor by entering their name and address at the top of the document.
- Fill in the effective date and issued date relevant to the transaction.
- Provide property details, including property number and description, to specify the location.
- Indicate the ownerâs name(s) alongside their decimal interest in production.
- Ensure all owners sign the form to validate the agreement.
Does this document require notarization?
Notarization is generally not required for this form. However, certain states or situations might demand it. You can complete notarization online through US Legal Forms, powered by Notarize, using a verified video call available anytime.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to complete all necessary fields, especially owner information and decimal interests.
- Not providing timely notice of changes in ownership or interest.
- Using outdated versions of the Division Order.
- Forgetting to include all co-ownersâ signatures.
Why complete this form online
- Convenient access to legally vetted templates prepared by licensed attorneys.
- Editability allows users to tailor the form to their specific needs easily.
- Instant availability saves time compared to traditional methods of obtaining legal forms.
- Secure storage and quick retrieval options for future use.
Legal use & context
- The Division Order is a binding document that outlines the distribution of oil and gas proceeds among owners.
- It helps protect owners' rights and ensures clarity regarding interests in production.
- Understanding the terms can prevent disputes and facilitate smooth transactions.
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FAQ
A division order is a record of your interest in a specific well. It contains your decimal interest, interest type, well number and well name. Division orders are issued to all that own an interest in a specific well after that well has achieved first sales of either oil or gas.
A Division Order (DO's), also known as a Division of Interest (DOI), is the instrument which details the proportional ownership of produced minerals, including oil, liquids, natural gas, etc., in a well or unitized area of production.
For all three division symbols, we say divided by. The division in a is read from left to right: twelve divided by six. The division in b is read from top to bottom: twelve divided by six. The division in c is written with a division box. We read the number inside the box first: twelve divided by six.
Net revenue is the amount that is shared among the property owners. To determine net revenue interest, multiply the royalty interest by the owner's shared interest. For example, if you have a 5/16 royalty, your net royalty interest would be 25% multiplied by 5/16, which equals 7.8125% calculated to four decimal places.
A Division Order (DO's), also known as a Division of Interest (DOI), is the instrument which details the proportional ownership of produced minerals, including oil, liquids, natural gas, etc., in a well or unitized area of production.
Division is breaking a number up into an equal number of parts. Example: 20 divided by 4 = ? If you take 20 things and put them into four equal sized groups, there will be 5 things in each group.
We always follow division with multiplication, multiplying the divisor by the number we put at the top of our division problem. In this case, it would be 7 x 1, which is 7, so we would write 7 underneath the 11.
Your job as a Division Order Analyst is to determine each owner's share, and distribute checks accordingly. You may work for only one company, keeping detailed records about the people who own the company's equipment and resources.
