We have recently received a few division orders in the mail and I remember hearing that you always want to make sure that your percentage is accurate on them before signing. All I have to go off as far as even knowing our percentage is pretty much the data on Texas File (we recently has a transfer of Trustee’s and did not receive any accounting or deeds or records of any sort on what we own). Does anyone know how accurate Texasfile’s data is? Is it accurate enough to base something like this off of and potentially argue with the company about? And if so, how does one go about that? Is an attorney necessary or is it something that can be settled with a phone call? I’m highly doubting that the latter is the answer, but you never know?!
You must know all the factors involved to calculate decimal interest , which includes the royalty interest from the lease, the net mineral acres owned ( for example the legal description in the lease might be for 100 acres, but you may only own 1/2 undivided interest, or perhaps be burdened with a 1/16th npri) and the amount acres in the pooled unit. With cross unit allocation wells, the percentage length of the perforated lateral within the unit comes into play, or perhaps a production sharing agreement. I have had luck by emailing the payor and asking them for their method of calculation and factors used to determine interest.
Texas File provides access to deed records for title research. Deeds will describe the gross acreage under which you own minerals, but rarely describe your fractional or percentage interest in the acreage. For example, ABC originally owned 100% of a 100 acre tract. At death, the tract was divided between the 5 children, who each then owned 1/5 of 100 acres = 20 net acres out of the full tract. When one child died and left to his 4 children, so each child got 1/4 of 1/5 of 100 acres (same as 1/4 of 20 net acres) = 5 net acres each. Any lease will describe the 100 acres under which the grandchild owns a net 5 acres. To determine how many net acres you own under the tract, you need to trace the title history to see how the tract ownership has been divided over the years and determine your fractional interest in the tract. Sometimes these fractional interests are very small, such a 1/200th and there are many owners. Then you calculate your royalty DOI, based on your net acres as a portion of the well acres and apply your royalty rate. You can ask the oil company how the DOI calculation was made - including your net acres, the well acres and the royalty rate.
Thanks folks. This helps immensely! There’s a lot more to it than I would have hoped or expected but with my fellow comrades and mentors on this forum. I have faith that I’ll figure this all out in time.
