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Home » Blog » Accounting Basics » Understanding Division Orders for Mineral Interest Owners and Operators

by | Last updated Sep 14, 2022 | Published on Sep 14, 2022

What are the concerns?

An inaccurate division order can spell a lot of trouble for all parties involved. Mispayments are not always detected expeditiously, and they can often create practical and legal challenges if they are not resolved quickly. However, the unfortunate reality for operators is that, without thorough oversight, inaccuracies are inevitable, especially when you factor in varying division order laws from state to state. These mispayments are usually caused by simple human error: miscalculations, typos, system errors, ownership analysis errors, and so on.

While underpayments are a bit simpler to catch and resolve, overpayments can get especially complicated, often requiring litigation in particularly hairy cases. It’s not terribly uncommon for overpayments to go undetected for many years before they are discovered. And, by the time they are eventually discovered, the payee may have already spent the excess. Dealing with the consequences of a mispayment can be a grueling, time-consuming process, especially for operators with an unexpected lawsuit on their hands.

How can PetroLedger help you?

Our team of oil and gas professionals have decades of experience helping operators and mineral interest owners ensure that their assets are properly allocated, from the beginning of production to the end of a well’s life cycle. We have a team of division order analysts that will maintain your ownership records and identify any changes in interest, protecting operators from double liability and mineral interest owners from inaccurate royalty payments.   

For mineral interest owners, it’s crucial to catch any mistakes before signing the division order rather than discovering it later. Our division order analysts will verify decimal interest accuracy and make sure you receive timely and accurate revenue distribution every month. If inaccuracies do potentially happen, our team will resolve any resulting disputes and ensure that any unpaid royalties are reconciled.

For operators, we will be there every step of the way to help you navigate through the division order process. By outsourcing with PetroLedger, you can expect our team of oil & gas professionals to:

  • Verify interest and prepare division orders for execution
  • Research, calculate and prepare division of interests for producing wells
  • Research and prepare burden breakdown spreadsheets
  • Review and research division order title opinions for requirements
  • Obtain items needed for release of funds suspense

When you have multiple interests in wells, whether as an Operator or as a Non-Operator, we know that maintaining your Division Orders is integral to your success. By outsourcing with PetroLedger, you can feel comfort knowing that our division order analysts will always provide you with the oversight necessary to avoid any mispayments and focus on production.

Interested in how we can help you? Call our team today, or send us an email!

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ABOUT THE AUTHOR

<a href="https://www.petro-ledger.com/author/lrabalaispetro-ledger-com/" target="_self">Lauren Rabalais</a>

Lauren Rabalais

Author

Creative Marketing Associate

Lauren, one of our youngest team members, comes to PetroLedger shortly after obtaining her Digital Media Innovation degree from Texas State University. Armed with knowledge of digital and social media trends, Lauren brings a fresh perspective to PetroLedger’s online identity and ensures that our company reaches new clients.

Email Lauren: lrabalais@petro-ledger.com