My family finally received Division Orders from the company that drilled our section but I am not comfortable with a provision contained therein.
Can anyone explain the meaning of:
"No change of interest is binding on Payor until the recorded copy of the instrument of change or documents satisfactorily evidencing such change is/are furnished to Payor".
My concern is, although we have already gotten a couple of royalty checks, they’ve only been paying us at a 1/8th royalty when our leases (signed with another company before any of the customary legal hearings, prior to drilling….spacing, pooling etc…) stipulate 1/5th.
The drilling company has said they are going to pay us the 1/5th -----which is in fact reflected in the decimal interest on the division orders just received----as well as the penalty interest on the unpaid balance. Does the above provision release them from paying the 1/5 royalty, the penalty interest, both or none of the above?
If anyone can shed some light, I’d be most appreciative.