Land Administration in Oil & Gas: What You Need To Know blog post

Land Administration in Oil & Gas: What You Need To Know

Alex Ball & Mike Gibson
October 25, 2023

The world of oil & gas is a complex and multifaceted industry, and at the heart of its operations lie crucial documents known as lease records and division orders.

These documents are essential for maintaining transparency, ensuring fair distribution of revenue, and supporting the efficient extraction of valuable resources. PetroLedger prides itself on being equipped to track those small details with our skilled Land Administration team with multiple professionals and decades of experience within the industry. If you don’t want to sweat the small stuff, PetroLedger has you covered!

When it comes to Land Administration, our team is the best in the industry. First, we have Lease Records section, where we keep an accurate track of leases, contracts, and run the necessary reports to maintain the data in real time. Our second area of Land administration is Division Order, where we maintain ownership by division of interest in order to make the correct payments to all the involved parties. For a more in-depth look at how PetroLedger can help you with both the big and small details of your land-related needs, keep reading!

Lease Records

Oil & gas lease records are the foundation of any drilling or exploration project. They are legal documents that establish the rights and responsibilities of parties involved in the extraction of natural resources from a particular piece of land. Some of the key elements of these records are lease agreements, legal descriptions, royalty provisions, and primary terms and extensions. For instance, a lease agreement and royalty provision outlines the terms and conditions under which a company or individual can explore, drill, and extract oil & gas from a designated area. This document often includes details about royalty rates, rental payments, and the duration of the lease. The Legal Description and Term provides a precise description of the leased land and the term during which exploration and drilling activities must commence. If successful, the lease can be extended. The terms of extension are often outlined in the lease records.

Our highly skilled team can set up the data for key obligations in regard to the lease, to track each lease on a monthly basis in order to not miss a payment or any agreement outlined in the lease. All of these highly detail-oriented tasks are common for land administrative companies, which are also related to the Division of Interest also called Division Orders.

Division Of Interest

Division order work comes into play after the drilling phase is complete and the well is producing oil & gas. This critical process ensures that the revenues from the sale of resources are distributed fairly among all the stakeholders. Here’s what you need to know about division order work. ownership verification, allocation of revenue, payment distribution, and record keeping are all major factors for a division order analyst. For example, the first step in division order work is to verify the ownership interests in the well. This includes confirming the identities and interests of royalty owners, working interest owners, and overriding royalty interest owners. Once ownership is established, division order analysts calculate how the revenues should be distributed. This involves applying the royalty rates and working interest percentages defined in the lease agreement. After calculating the distribution, division orders are sent out to all interest owners. They detail the individual’s share of the revenues, which is then paid out to the respective owners. Lastly, and probably one of the most important pieces, is that division order analysts must maintain meticulous records of all transactions and distributions. These records are crucial for auditing and compliance purposes.

What Can We Do?

The Land Administration process is often very complex and can lead to headaches if details are not thoroughly examined. Fortunately, this is the bread and butter for our land team here at PetroLedger. We have experienced Land Analysts, Division Order Analysts, Revenue Managers, and Owner Relations personnel who are equipped to handle the day-to-day operations of our Land work. Whether it be monthly reports on projects or making sure that all involved parties are up-to-date on their contracts, PetroLedger has both the knowledge and experience to make sure that you are covered when it comes to any land-related projects.

If you want to read more insights from PetroLedger, check out our blog! If you are interested in working with us, please contact us!

Alex Ball & Mike Gibson

Alex came to PetroLedger after graduating from Creighton University, where he studied Marketing and Business Intelligence Analytics: Digital Media and Design. He now uses his experience to help the marketing team grow PetroLedger's online presence, as well as performing various administrative duties in our Houston office.

Mike is our Vice President of Land & Business development. He has over 18 years of experience in the energy industry and has worked in a multitude of states, counties and basins throughout the United States. Mike is a member of AAPL, HAPL and PBLA. He has been highly involved in HAPL over the last 10 years, where he has held positions as Chairman, Director, 3rd VP, 2nd VP, 1st VP and President, as well as serving on AAPL committees. Also, in 2015, he was recognized as one of Texas Best Landman by Texas Top Producers and TIPRO. He earned a Bachelor of Science from Stephen F. Austin State University and is a Certified Professional Landman. Mike loves spending time with his family and enjoys college football, disc golf and any outdoor sports.

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