NADOA Model Form Division Order 1995-2024 free printable template

A division order is a contract between an oil and gas company and a mineral rights owner that outlines the terms and conditions for the sale and delivery of mineral production. It is the document that specifies the amounts and timing of payments, as well as the locations and depths of oil and gas wells that are subject to the division order.

The deadline to file division orders for the 2023 tax year will be April 15, 2024.

The operator of an oil and gas well is typically required to file a division order.

Filling out a division order typically follows a specific format and requires specific information. Here is a step-by-step guide to filling out a division order: 1. Obtain a copy of the division order form: Ask the operator or producer of the oil and gas well to provide you with a division order form. This form may also be available on their website or through your lawyer. 2. Review the division order form: Carefully read through the entire form to understand the information being requested and any instructions provided. It is essential to fill out the form accurately and completely. 3. Fill out your personal information: Start by providing your legal name, address, phone number, and other contact details. Ensure that your personal information matches the details on file with the operator. 4. Verify your interest and decimal interest: Indicate your interest in the well or property by specifying the net mineral acres (NMA) you own or the percentage interest you have. If you are uncertain about your interest, consult your attorney or mineral rights specialist for assistance. 5. Provide your tax identification number: Enter your Social Security Number (SSN), Individual Tax Identification Number (ITIN), or Employer Identification Number (EIN), depending on your situation. This information is necessary for tax reporting purposes. 6. Review royalty payment details: Check the form for sections related to your royalty payments. Fill in your desired payment method, such as electronic funds transfer (EFT) or receiving physical checks by mail. 7. Sign the division order: Sign and date the division order form to confirm the accuracy of the information provided. By signing, you are also acknowledging your acceptance of the terms and conditions outlined in the division order. 8. Return the completed form: Follow the instructions provided on the form to submit the completed division order. Typically, you will send it to the operator or producer's address mentioned on the form. 9. Keep a copy for your records: Make a photocopy or scan the completed division order form for your records before sending it. Retaining a copy will help in case any disputes or issues arise in the future. Remember, it is vital to consult with a legal professional or mineral rights expert if you have any doubts or concerns during the division order process.

The purpose of a division order is to establish the proportional ownership and outlines the rights, responsibilities, and obligations of interest owners in an oil and gas well or mineral lease. It is a legal document that serves as a contract between the operator (company responsible for drilling and producing the well) and the interest owners (individuals or companies with ownership rights in the well). The division order typically contains important information such as owner's name, address, and ownership decimal percentage, which determines the share of production revenue each owner is entitled to receive. It also includes instructions for the operator to distribute the proceeds from the sale of oil, gas, or minerals, along with provisions regarding payment schedules, interest charges, and other relevant terms. By providing clear guidelines and ensuring correct division of proceeds, a division order helps prevent disputes and misunderstandings among the interest owners. It provides a legal framework for revenue distribution and acts as a record of ownership interests, helping to maintain transparency and accountability in the operation of oil and gas wells or mineral leases.

The specific information that must be reported on a division order may vary depending on local laws, regulations, and industry standards. However, some common information that is typically included in a division order are: 1. Landowner name and address: The division order should identify the owner(s) of the land or mineral rights that are subject to the order. 2. Legal description: This refers to a detailed description of the property or land where the mineral rights are located. It typically includes information such as the survey or section, township, and range. 3. Operator information: The name and contact information of the company or operator responsible for drilling and operating the well should be provided. 4. Well details: The division order should include information about the well, such as its name or number, location, and API (American Petroleum Institute) number. 5. Production interest and decimal interest: The division order needs to specify the percentage or decimal interest that each owner has in the production from the well. This determines the share of revenue that each owner is entitled to receive. 6. Payment details: It should outline the details of payment, including the method of payment (e.g., check or direct deposit), payment frequency, and when the payments will commence. 7. Deductions and taxes: Any deductions or adjustments that will be made from the payment, such as taxes, production costs, or any other fees, should be clearly stated. 8. Signature and date: The division order should be signed by the landowner(s) to indicate their agreement and acceptance of the terms specified. It is important to note that the specific information required on a division order may vary, so it is advised to consult local laws, regulations, and industry practices for accurate and comprehensive information.

The penalty for late filing of a division order can vary depending on the specific jurisdiction and the regulations governing the division of property or assets. In some cases, the penalty may involve paying interest on the late amount, while in other cases, it may involve additional fines or penalties imposed by the court. It is recommended to consult with a legal professional or review the specific regulations applicable to your situation for accurate information on the penalties for late filing of a division order.

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