Division Orders language

We’ve received division orders for a pooled lease that includes language we have not seen in other leases we hold. Under the “Terms of Sale” Purchaser shall compute quantity and make corrections for gravity and temperature and make corrections for impurities. Deductions may be made for gathering, transportation, treating, conditioning, marketing and other post production costs downstream of the wellhead and fro gross production, severance, or other similar taxes on production or the proceeds thereof as allowed by applicable law. Payee agrees to refund payor any amounts attributable to an interest or a part of an interest that payee does not own. "

The deductions seem to be giving away a lot of costs that should be born by the production company? I do not see any similar language in the original lease. Can one decline the terms of the Division order or request to remove?

This doesn’t follow the division order statute.

Thanks Wade

Is there a Standard Division Order Document…and where might I look up the Statute?

Unless things have changed in the last year, these sites might help you. I suggest hiring a lawyer. I recommend Wade Caldwell.

https://codes.findlaw.com/tx/natural-resources-code/nat-res-sect-91-402.html

National Association of Division Order Analysts Form 2017

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