Is Division Order needed in this instance?

Division Orders
1

The following concerns Wells in Texas:

Two Wells, call them “A” and “B”, that are both in the same Quarter of same Section of same Block. (My Mineral Deed covers the entire Section.) Well “A” was completed by Oil Company #1 a few years ago and is producing. Oil Company #2 has bought Oil Company #1’s interest, and Oil Company #2 has completed “new-drill” Well “B” in same Quarter where existing Well “A” is located.

I received letter from Oil Company #2 saying they have drilled and completed Well “B” and will not require (and did not send) a Division Order for newly completed Well “B” as, in their words, “ownership in this well is the same as Well “A”.

Is it true that a Division Order for the new Well “B” is not required? Is this in my best interest …… or is Oil Company #2 just trying to save themselves time and effort?

Any other questions I should be asking or things I should know about this?

2

I am unaware if #2 would have to issue a DO on the B well, but I do know that if you are inheriting they should’ve sent a new DO transferring the lease into your name anyway. If they have already done this than the B well might have been included. It’s definitely worth looking into just to make sure you are covered. Also I would find a decent oil and gas attorney and ask them this question if you don’t hear back from your operator. Good luck!

3

If the wells have the same RRC oil lease ID#, due to being in same unit or on unitized acreage where all owners have undivided interest, then an operator may not send a new DO. Production will be reported jointly if wells have same the lease #. Presumably you have retained a copy of your original DO and agree with royalty decimal.