I am a new working interest owner (no experience in oil/gas). I purchased some working interest on EnergyNet last year in North Dakota as a way to slowly learn the business. Chord energy is the operator. I finally just now received the division orders, although I provided them conveyance documents last July (2023). The effective date on the division orders is showing either November of 2023 or February of 2024 depending upon the wells, yet conveyance documents had an effective date of 7/1/23. Is this an issue that I need to have the operator fix before signing the DO? From the research I have done, it looks like division orders aren’t required in North Dakota in order to receive payment? Is there also some interest I can demand from Chord since they are so far behind in issuing anything from my owned working interest? It looks to me like ND passed a law showing interest should accrue at 1%/month for anything later than 150 days? I had one initial email correspondence received back from them last summer, and I emailed back every few months for an update but never heard anything from them until I just received the DO’s in the mail. Thanks for the help.
Effective date on Division orders should probably be first sales or first production, not the conveyance date of your ownership. Check your wells for their first sales dates. Best method is to send a certified mail return receipt request for payment and interest. That way you have a paper trail. Send to the Division Order department.
If you are new to Working interest ownership, I hope you have an attorney setting up the proper legal entity to hold the interest to keep it out of your personal property. You have the potential for liability as a working owner.
Hi - I also had the same question of Chord for division orders I received in North Dakota. Here’s the answer I got via email from Chord: “Unfortunately, we are not able to change the effective date of our Division Orders, they reflect the date of the current deck and are not tied to the individual owner. You are free to cross out this date if you like.”
My follow up question: “What does “current deck” mean? All of the other division orders have an effective date of our mother’s death which represents when my sister and I took ownership, except this one. So perhaps understanding what “current deck” means will help me get my head wrapped around this mystery. Thank you.”
The answer from Chord: “Each well has all owners, usually 100-400 people that equal the number 1, on a “current deck.” The date of the Division order will match the last change to the deck as a whole, it is not generally tied to an individual owner but all owners in total.”
I’m still not thrilled with the answer, and our attorney consistently tells us to never sign a division order and we continue to heed his advice. Also, ours is royalty interest and not working interest.
The “current deck” is the operator’s spreadsheet for who owns what percentage in each well as of a certain date. If your attorney says not to sign a DO in ND, then you can send a certified letter to the Division Order department saying that you are attaching your W-9 and expect to be paid your royalty payment and interest as of the date of either first sales or your ownership (Depending upon your situation-answering for two folks here.). Note: other states such as Texas do require a DO.
Was there production on the well(s) from 7/1/23 forward? If so and you and the party that you bought it from agreed that you shall be paid on all production from that date forward, then you need to contact the person/company you bought it from to see if they have been in pay, if they have then youre going to have to hire an attorney or hope they are cooperative with you in returning the funds.