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So called “division orders”
After you have signed a lease, and after the driller has drilled a well and starts producing, the driller is supposed to start sending you royalties. That is what the lease says. But often the driller will send you something called a “Division Order” and ask you to sign it before they will start paying you the royalties.
To start with, a division order is neither a division of anything, nor any kind of court or administrative order. Your division/share is determined already by the title history. And no order has to take place before you get paid. The driller just wants you to sign it in case there is a law suit over how much you should be getting, and the driller can point to a signed division order and say, “See, the mineral owner agreed to the division of the royalty they should get.”
Some states allow drillers to require royalty recipients to sign division orders before receiving their royalties. Not so here in West Virginia. In fact there is a court case that says you do not have to sign and return a division order.
The problem is that some drillers will not start sending royalties unless you sign and return a division order they sent to you. Here is our advice if that happens to you:
First, read carefully through the document and scratch out anything you do not yourself know to be true. In particular the “decimal interest” number is something you are not going to know for yourself and you should scratch it out. (If 1 is the entire amount of gas produced, the decimal interest, “.12345” is your share of the royalty for the whole well or unit expressed as a decimal instead of a huge fraction.) Then sign it. Then make a copy/scan of it for your records. Then return it.
Second, if you still do not start getting royalties after sending back the scratched up copy, contact a lawyer familiar with oil and gas. You can file a lawsuit, and in the one mentioned above the judge even awarded the royalty owner’s attorney fees and costs for having to bring the lawsuit. We have a page with lawyers who may be willing to take such a case.
