I received an incorrect division order in March on new horizontal gas wells in Hughes county, Oklahoma. I immediately notified the company of the mistake. Made a couple of phone calls with no response. I’ve gotten a couple of emails saying they will look at my problem in the “order it was received.”
Meanwhile I received a check today on these wells. No division order was ever returned. The payment was one tenth of what it should have been. I sent another email today. And they replied that my account would be looked at when it’s my turn and that money would be put in suspense until that time that they could look at it. This involves two wells that will run through two sections. I have interest in both sections. One section percentage was done correctly the other was not.
Should I sign the correct one and write in the correct percentage on the incorrect one and send them in?
Should I expect interest on the money that is in the suspense account? I think they hurriedly sent me some money because the wells started producing in November. They sent money based on the incorrect percentage. They ignored the correct percentage like it didn’t exist??
I’m just amazed at how some of these companies treat royalty owners. I wonder how they would feel if their paycheck was messed up and their supervisor said we’ll get to your problem “in the order it was received.”
DOI calculations are done on a well-wide basis so that all royalty interests and working interest total to 100%. Called a “deck” in the industry. If your DOI is too low, then some other decimals are too high. The division order analyst will have to do a new deck for the entire well. If there are a lot of internet owners, this can take some time. If you have two separate division orders for different wells, then you can sign the correct DO to be paid on that well.
Do not try to write in your own decimal calculation on the incorrect DO as that will not be accepted.
We are going through the same thing with a new well in OK. I was able to find up that is split up 13/16, 1/16, 1/16 and 1/16. It is supposed to be split evenly 4 ways. One entity has received a few thousand. The rest of us less a thousand each. Trying to get through to the right person is like pulling teeth. They keep telling us to check with the lawyer, the lease creator, etc., etc.
Have you sent a certified letter to the operator laying out the problem, with as much detail as possible? Ask for the title report for your acreage which should note the deed history and ownership. Send a copy to owner relations, land department, accounting and division order departments to be sure that it is seen. Phone calls and emails will not elicit the same response. Review your deed language to see that it assigned the land in 4 equal parts. I assume that you are certain that the grantor owned 100%.
Have you checked the spacing/pooling for the section in question and are you sure the section that’s incorrect according to you isn’t a multi section unit? It happens often, where a section is allocated at say 40% and mineral owners think they should be getting paid for the 100%.
The percentage is wrong because they have my ownership wrong and are paying me 1/6 instead of 5/12 in one of the two sections involved. The other section is correctly figured with 5/12 ownership. When they sent the check out they just sent a check on the incorrect 1/6. They did not include the other section that was correct at 5/12! If they would have just returned a phone call or email this could have easily been cleared up in five minutes. Now I have a check with an incorrect percentage that I feel I shouldn’t cash because to me it just screws the accounting up even more. Why would they put part of it in suspense and still send a partial payment out?
I’m giving them more time. Hoping they will respond. But doesn’t Oklahoma law say they must pay me interest on this money they have put in suspense since the wells started producing last November?
They obviously have or had the ownership paperwork because they figured the ownership correctly on the one section. The other section is on the same paperwork.
Not sure I understand the technicalities of what you’re saying here. But my concern, which I expressed to them, when they only sent me 1/6 on the one section instead of 5/12 is that they sent a check for that difference of 1/4(?) to a former owner who is deceased. So I don’t think the “deck” would be messed up. They just need to send the money to the correct people.
It may be that the additional minerals are in the former owners name or it may not. Whether the drilling title opinion (DTO) attributed the addtional minerals to deceased owner or to someone else, the title must be reviewed and corrected. The division order analyst does not have the power to override the DTO and the legal department. After title is cleared, then the decimals are corrected. Usually the royalties calculated by erroneous decimal will be reversed back to date of first production and then month-by-month royalties will be paid on the corrected decimal. If you are being paid on one well at the correct DOI and on another well on the incorrect DOI, then I am not sure that it is helpful to hold all the checks uncashed. However, that will depend on OK law about which I know very little and you should get advice from an OK oil and gas attorney. On my experience, a title issue is not resolved by a phone call. You might consider sending a letter or email explaining the issue with, or at least referencing, your title history documents to the landman at the company who is responsible for the wells.
I’m guessing these are long producing wells and new ogls were not filed on the section in question? You mentioned the additional interest you’re claiming was sent to the deceased owner? I have no clue who that is, if the proper paper work was filed on that interest, if he/she owned less than you think or he/she possibly distributed that particular section to other heirs at a higher %? An oil and gas attorney that knows what they’re doing did a title opinion on the section and flagged it for a reason if the money is held in suspense. Unfortunately it’s the mineral owners responsibility to clean it up. I’d ask the landman for the operator (should be on their website or on Google) in that area what the title opinions comments and requirements are on your interest to get into pay. The division order/accounting department aren’t going to be able to help you on this. Then go from there if ya need to hire a probate or title attorney to clean it all up.
Chuck, it can get frustrating today with many companies contracting out many of their owner relations services. This creates backlogs that almost seem to become circular. Make sure to put the operator on notice with an email stating that they are subject to interest payments for delays. It is always a great idea to put a little work into some data searches to try and locate direct emails for people in the company. This may not get you to the correct person, but they can forward it to the proper person. It has worked for me in the past. Good luck.