Minerals

Division Order

byEnverus

Division Order

A division order for minerals is a legal document that outlines the proportional ownership and distribution of revenue from produced hydrocarbons, such as crude oil, natural gas, and natural gas liquids.
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Frequently Asked Questions

How are division orders created?

Division orders are created after a well has been drilled and production has begun. The operating company prepares the division order by confirming the title and determining each owner's decimal interest (net revenue interest) in the well.

What is the difference between a division order and a lease?

A lease establishes the rights and terms for mineral extraction, while a division order details the distribution of revenue from the produced minerals.

How do changes in ownership affect division orders?

Changes in ownership affect division orders by requiring updates to reflect the new ownership structure. When an owner transfers all or part of their interest, the operating company issues an amended division order or transfer order.

How do royalties relate to division orders?

Essentially, division orders formalize the distribution of royalty payments based on the agreed-upon ownership interests.

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