Production Sharing and Division Order

Ownership and Title
1

We have questions regarding a Production Sharing Agreement and a Division Order we've received from Devon Energy requesting signature.

The letter says: "Devon Energy has recently had the title to the ownership of the Boyd Townsite Gas Unit updated. According to the updated title, you are the current owner of the royalty interest attributable to a 0.5 acre tract in the unit."

It goes on to say: "Up to this point, Devon Energy was never provided with documentation evidencing any of the (property) conveyances. The change in ownership will be effective from this date forward."

We bought this property in Sept. 1995. In researching the RRC website we discovered a well was already in production at that time and 2 more went in to production in 2009. Recently we received a notice of taxable value from Wise County. That is how we were able to locate the information on the RRC website.

Our first question is, has Devon been paying royalties on these wells all along and if so to whom? If they haven't been paying royalties, shouldn't they pay us back to Sept. 1995? or do they intend to only start paying from the date they "discovered" we own the property?

This is all very confusing and we will appreciate any assistance anyone here can give us.

2

Rene, I'm not an expert on this but since no one else reponded I'll comment.
It is the burden of the purchaser of the property/mineral interest to provide documerntation of the purchase transaction. If the energy company had to keep up with all the changes to the property in a unit, it could be a nightmare. Especially where there are multiple property owners.
It seems to me they should have picked up on the 2 additional wells in '2009 that there had been a change in ownership but again the burden is probably not on them. The terms of the lease may spell out the requirements.
Joel